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Separate business and personal expenses to simplify your bookkeeping process

5 Small Business Bookkeeping Tips for Better Financial Health

As a small business owner, do you enjoy working with numbers as much as we do? Most likely, the answer is a hard NO. 

How do we know this? 

Many entrepreneurs run to certified bookkeepers and accountants like us for assistance. Others try to keep their business’s books up to date but get caught up in their day-to-day responsibilities and never get around to it.

Whatever your feelings are regarding bookkeeping, it’s one of those duties that no small business owner can avoid forever. However, applying these bookkeeping tips early on will save you from costly mistakes in the future.

When you don’t have a business accounting structure in place, goals can be missed, and important paperworks can be overlooked. To help you manage your small business bookkeeping chores and increase your profits, follow these proven tips.

Proven Tips To Simplify Bookkeeping in Your Small Business

Here are the top small business bookkeeping tips that will save you time and money:

1. Send Timely Invoices and Follow-ups 

A very common problem among small businesses is poor invoice management

When you fail to keep up with invoicing and payment follow-ups, you limit your cash flow, as well as your company’s flexibility and growth.

To keep your bank balance healthy and the income rolling in, send out client invoices within the month after the job is done. And don’t forget to clearly state the due date of the payment.

2. Keep Track of Your Expenses 

Expenses can be difficult to track, which means you might be missing out on tax write-offs that you could have gotten.

Recent changes to tax policies can negatively impact your business if you’re not aware of what costs can be deducted. Seeking advice from an accountant can help you maintain accurate records of all the tax deductions you can claim.

You can also monitor your expenses easier by making company purchases with a business credit card. Business credit cards can be useful for keeping expenses organized and trackable. Most credit card companies now offer the option of categorizing your financial statement into different types of expenses, which is one less chore for you to complete.

3. Automate Everything You Can

Manually crunching data into spreadsheets is a thing of the past. Consider automating your bookkeeping process with accounting software and banking online. You can then connect your software with your business bank account to ensure that you always have accurate, up-to-date data. 

Before you make a purchase, do your research and determine which accounting software will best meet your business’s demands. Consult with your accountant to better understand how to set up and to utilize the tool.

4. Conduct A Quarterly Review

Examine your bookkeeping and accounting records thoroughly at the end of each quarter. Look for trends like increasing or decreasing sales, year-over-year revenue growth, or an increase in late payments.

To avoid financial missteps, have a meeting with your accountant. They can walk you through the estimation of your quarterly payments and ensure that you’re not paying more than necessary.

5. Outsource Your Bookkeeping and Accounting Tasks

Hiring a professional bookkeeper or accountant for as long as you need can make a significant difference for your business throughout the year. While the duties of a bookkeeper and an accountant overlap, they have their own specializations.

If you want to outsource a service that covers the documentation of your income and expenses, as well as tax preparation and strategic planning, it’s best to hire an accounting firm.

A professional bookkeeping and accounting firm will keep your records up to date and organized, and will inform you about any fees, loopholes, or additional tax deductions for which you may be qualified.

Below is a list of the benefits you can expect from hiring a professional accounting firm:

  • Free time to focus on growing your business
  • Lower labor costs
  • Tax planning and loan strategies
  • Efficient and secure virtual workforce

Being both the office administrator and bookkeeper can take up your family time and energy to focus on more important functions in your business. An outsourced accounting firm will take that load off your shoulders.

Final Thoughts: Tips To Simplify Bookkeeping in Your Small Business

Bookkeeping assists you in budgeting, preparing tax returns, and keeping your business financially healthy. It’s importance in the success of your business cannot be stressed enough.
If you find our bookkeeping tips helpful, visit our blog or get in touch with our professional bookkeeping and accounting team. Today CFO offers a free consultation today!

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