Bookkeeping tips – to help you manage your books better and give you the information you need to run a successful business
Find a good Advisor
When you have bookkeepers and accountants that you know you can trust and rely on, it’s going to make everything simpler. They can teach you how complete your books properly and how to use your accounting software to its full potential. Having a good advisor can become invaluable with the success of your business.
Go paperless by using cloud-based Accounting
There are a number of cloud based products that are available to assist you in managing your business. Cloud accounting will allow you to enter and access your finances wherever you are. This will increase efficiency for both you and your Accountant.
Use the right software
There are an endless number of accounting programs for small business to use. Popular accounting programs include Xero and MYOB. Researching these can be a tedious task and it’s hard to know what would work best for you and your business. A good accounting program will allow you to automate tasks, produce valuable reports, have a central dashboard for easy management and most all it should be user friendly. If you need help choosing the best software for you and your business we can point you in the right direction.
Set aside time each week to devote to Bookkeeping
Keeping your books up to date takes time. Allocate a time each week in your calendar to update your records. Having this time booked in will help to keep things organised and lessens the chance of paperwork being lost. This will also allow you to have a broad overview of your business every week and will ensure you don’t fall behind. Because, trust us – when you fall behind, there’s a good chance you won’t recover.
Find and use add-ons that will help you
Cloud based accounting programs like Xero and MYOB allow other software programs, commonly called add-ons, to integrate with them. These add-ons, like Tradem8 for trade industries, Dear Inventory for those holding stock and Workflow Max for businesses selling time, can reduce time taken to manage your books and importantly allow you to manage your business better. Receipt Bank is a great tool to reduce the time taken to process supplier invoices. Talk to us to find out what is right for you.
Set aside money for any taxes
Keeping on top of your Bookkeeping can help you prepare for you tax bill as you’ll have the information for your Accountant to calculate exactly how much you’ll need to pay later on. Setting aside money every month to pay your end of year tax bill is good practice. This means you won’t have to cut back at the end of the year or get a loan to pay your taxes. You should make sure you talk regularly with your Accountant so there are no surprises.
Avoid cash where possible
Using cash makes it hard to keep track of spending. With today’s technology you can make payments electronically from almost anywhere. By using a credit or debit card you can keep track of the amount spent, what it was spent on and where. This makes tracking expenses much easier.
Keep Personal and Business Finances separate
It is important to keep your private transactions separate from your business transactions. Mixing the two can get messy and complicated. It’s a lot easier to keep accurate records if you’re only dealing with one type of account. You will save a lot of time keeping these accounts separate.
Keep track of your expenses
Expense tracking is a part of Bookkeeping that you can’t treat as low priority. Make sure you keep a log of all your expenses – most accounting software will allow you to do this automatically. When entering these into your software, make sure each item is categorised correctly, i.e. cost of sales, stationery, fuel, internet etc. You can also group your costs into the type of expense, so you can see what each category is costing you, eg employment related, office administration and legal and finance.
Check in regularly on your accounts receivable
Having a customer owe you money for goods or services isn’t the same as having that money in your business account. Make sure you stay on top of your accounts receivable by running regular reports, at least monthly, from your accounting software. Without receivables, income dwindles which can cause other issues within your business.
If you keep your records regularly updated you’ll be able to spend less time on the paperwork side and more time doing what really matters – running your business. If you have any questions about the above or need some help with your Bookkeeping, please contact us here.