Bookkeeping is an essential component of having a successful business. However, bookkeeping is only beneficial if done correctly. If you are not confident that you can do it correctly in-house, then you may make the decision to outsource it to an accountancy firm. Of course, if you choose to do this then you’ll only want the best, such as Another Answer, who are award winning accountants in Buckinghamshire. But if you decide to do it yourself, you’ll want to read on, as below you will find 8 bookkeeping tips to keep your business running smoothly.
1. Keep a Paper Trail
You want to keep a paper trail of all your expenses. This trail is proof of the expenditures that you are claiming in your bookkeeping. It is important in the case that you need to prove them to the IRS. Receipts are also helpful if a transaction on your bank statement leaves you scratching your head. As it gives you something to compare it to. Your paper trail does not necessarily have to be paper. You can scan your documents and keep them in an electronic format.
2. Track Your Accounts Receivable
It is important to track all the money that you have coming in. This will allow you to see how profitable you are and notice trends in income. Tracking your accounts receivable will also help you make sure your invoices are always paid and take care of any outstanding accounts. Accordingly, you can learn more about how to use credit control software tools to track your accounts receivable by heading to chaserhq.com.
3.Keep Your Books Up-to-Date
Bookkeeping is not something to be done once a year. You should update your accounts at least monthly, if not weekly. Regular bookkeeping will help you track your business and make sure that it is healthy. It also makes the job of bookkeeping easier and prevents large mistakes from being found too late.
4. Reconcile All Accounts
You will want to reconcile your accounts with your bank statements every month. That is the only way to know that everything is accounted for. You will want to do this for more than just your bank accounts. Any account with an ending balance should be reconciled. This includes credit cards, loans, lines of credit, and payroll liabilities. This can be quite complicated and time-consuming so, while it is possible for you to do yourself, many businesses chose to outsource this to experts similar to this toronto bookkeeping service, for example.
5. Invest in the Right Software
Today there are so many options for accounting software. When choosing your software, it is important not to skimp. Otherwise, you may find you are missing vital applications that you need down the road. One affordable solution you may want to consider is QuickBooks Online. Software is always going to be needed, especially how nowadays so much has moved online and that is where the majority of businesses are based. Making sure software is working to a high level and patches are being fixed, is a priority. Websites such as Mirantis can offer a deeper background into how this can be supported, and what it will mean for those who create their own software for needs such as this.
6. Use Your Bookkeeping to Grow Your Business
Bookkeeping is a useful tool for growing your business. You can generate reports from the information you input. Then you will be able to analyze the reports to set goals you wish to meet. You can also use it to develop a budget and then use future reports to make sure your budget was met. You will able to identify areas of overspending and track income patterns. All these are beneficial tools to grow a business.
7. No “Hands-Off” Bookkeeping
If you choose to outsource your bookkeeping it does not mean that you should make sure that you are at least receiving monthly reports. You can use these reports to grow your business as outlined in Tip 6.
8. Get a Tax Review Before the Year Ends
It is important to know what your tax liability looks like before the year ends. To do this you should meet with a qualified tax preparer for a tax review. They will be able to instruct you on any moves to make to reduce your tax liability before the year closes out. It will also help you prepare if you have no way to avoid owing a substantial amount of taxes.
Keep Your Business Running Smoothly
Whether you do your bookkeeping yourself, hire someone in-house, or outsource it to a professional firm like Sanjay Gupta CPA, these 9 bookkeeping tips will benefit you. Be sure to apply them so that your books are always in order. This will allow you to grow a healthy and productive business.
Questions or want to schedule an appointment? Contact us by clicking here.