If you own a small business, you know that it can be easy for spreadsheets and transaction tracking can fall way down on the priority list. Not to mention that you may not be a ‘numbers person who enjoys finances and bookkeeping – especially when you could be putting creative energy into your business instead.
If the idea of looking at your business’s books scares or bores you, you aren’t alone!
Below are 7 bookkeeping hacks for small businesses that you can try.
1. Separate Business and Personal Transactions
If you do nothing else mentioned in this article, make sure to definitely set up a separate bank account for your small business. Having separate accounts and credit cards will make everything, including bookkeeping, much easier for you. Another bonus is that your business will build its own credit rating that is completely separate from your personal score.
If you have a small business but didn’t split your accounts right away, don’t fret – just be sure to set up a second account as soon as possible to make things smoother going forward.
2. Automate, Automate, Automate
One of the most time-consuming aspects of small business bookkeeping is manual data entry and having to reconcile numbers by hand. By using cloud-based bookkeeping software, you can connect your business accounts and sync up all of your transactions automatically.
Some software also allows you to integrate additional applications for tracking receipts, invoices, and other items that would otherwise be manually inputted. There are plenty of software options available at a range of prices and with a range of features to fit the needs of any small business.
3. Do Regular Checkups
If you let your bookkeeping tasks pile up, you run the risk of having overdue invoices, bounced checks, or unbalanced books. You should be doing some bookkeeping work regularly to make sure everything is in order.
At a minimum, you should schedule time for yourself once a month, but many small business owners prefer to do their bookkeeping weekly or even daily. The main thing to remember is: the longer you put aside your bookkeeping tasks, the more time you will need to set aside when you finally get to it.
In addition to regular checkups, be sure to take an in-depth look at your records at the end of each quarter. This is a great way to spot trends such as growth or decline in sales, customer behavior, or revenue changes from year to year. This information can be valuable to help you prepare your business for the future!
4. Ask for Advice
Depending on your small business, there may be one or more options for bookkeeping that are best suited for you. It is always a great idea to consult with professional Victoria BC accountants to see if one software or another would suit your needs, or if you need to explore a more custom option. Not only can they recommend a solution, but they may also be able to provide a quick tutorial of the software for you.
5. Monitor your Accounts Receivable
Part of your regular bookkeeping checkup should be to review any accounts receivable. When your business doesn’t have money coming in regularly, this can delay your expenses or cause other disruptions in your business. Keep an eye on when your receivables are due, and be sure to contact customers right away if a deadline is approaching. It is always better to get in contact to make a plan with the customer than to let invoices sit unpaid for weeks.
6. Keep Track of Business Expenses
When tax season comes around, there are likely more claimable items than you think. If you aren’t sure what you can claim as a business expense, do some research online or speak to your accountant. If you think you are going to be claiming business expenses on your taxes next year, be sure to keep detailed records of all expenses. To be extra prepared, you can scan and digitize all receipts and always put business expenses on your business credit card for easy review later.
7. Use Time-Tracking Software for Employees
If you are in the market for new software, consider implementing a cloud-based time tracking software for your employees. These programs allow employees to clock in and out on their devices, which saves them time and allows you to automatically track overtime, vacation, and staffing requirements.
This is another great way to reduce the manual data entry that comes with paper or digital timesheets. Find software that integrates with your bookkeeping software to make your payroll process even quicker too!
Keeping your books is a key part of owning a small business, but unfortunately, many small business owners don’t give the task the time or energy it deserves due to other obligations. Your business’s books can show you how your business is doing, and having up-to-date books is an invaluable benefit.
Since you can’t avoid bookkeeping forever, you might as well make it easy and manageable with the above tips – and remember, it is all about getting organized at the start, and staying consistent with your bookkeeping.
If you need help starting a bookkeeping routine that will work for you, we are happy to share some advice and get your small business on the right path. Contact us today!