Being a small business owner means you are responsible for keeping on top of your business’s books. Failing to do so could be costly for your business, but luckily there are several small business bookkeeping tips you can follow to help keep you on the right track.
With this in mind, we’ve published some of our top bookkeeping tips to help you keep on track.
Keep your personal and business finances separate
The common saying tells us not to mix our personal lives with our professional lives, and this certainly applies to finances.
Mixing your personal and business finances together can become confusing, and you can easily find yourself forgetting what’s what.
Set up a business bank account to help keep your business finances in order. It’ll also help you organise your accounting records and give you the best chance of sticking to your business budget.
In some cases, separating funds is not something your business can opt out of. If your business is an LLC or a corporation, you must open a separate account for business.
Keep thorough records
Organising and keeping accounting records, such as receipts, invoices and expenses, is extremely important, and the repercussions for your business could be serious if you don’t keep these elements organised and available.
If you prefer keeping paper records instead of electronic then make sure you store them in a secure and safe place, such as a filing cabinet. The best way to keep paper records organised is by using different labels and sorting strategies. For instance, you could colour code.
On the other hand, if you’d prefer all your records to be electronic, you could try out using storage software, including the many cloud solutions available. More storage systems can be found here.
We recommend that you consider a combination of both paper and electronic versions. That way you have a backup in case any records go missing or are destroyed.
Set reminders for deadlines
Being a small business owner definitely keeps your mind occupied, to the point where you could easily lose track of time and miss deadlines.
To avoid this happening, set reminders on your phone or email calendar for things such as business tax return due dates.
Google Calendar is also great for tracking important dates and setting up reminders.
Perform a quarterly review
One of the most obvious small business bookkeeping tips, but important none the less – at the end of each quarter, take a thorough look at your bookkeeping and accounting records.
This will help you track any trends occurring, such as growing or declining sales, year-over-year revenues, or an increase in late-paying customers.
Talk to your accountant, as they can help you look at the bigger picture, spot issues and opportunities more effectively, and help prepare you for future capital needs, such as buying new equipment or moving to a bigger location.
How can Relative help?
Relative offers a creative approach to accountancy for creative business people.
We recognise that running a business often means wearing different hats and experience tells us that most of the time the financial advice you receive isn’t born from the same viewpoint.
We might speak very different languages, but in short, we are communicators – it’s just that our language is numbers. It makes sense if we do the maths.