Bookkeeping is the practice of recording a business’s financial transactions into organized accounts on a daily basis. There are several benefits of bookkeeping. Bookkeeping data can generate actionable insights, helping business owners make better business decisions. When done properly, it can help you visualize your cash flow and ensure tax compliance.

Here are our top bookkeeping tips.

Keep Personal and Business Finances Separate

At first, commingling personal and business finances may seem like a small deal. However, it can quickly cause headaches for your finance team. Set up a separate account for your business and also get a separate business credit card. If your business is an LLC or corporation, you are required to maintain a separate business account mandatorily. With a separate business account, it’s easier to go through the purchases and sales relevant to your business.

Automate As Much as Possible

Manual bookkeeping is inefficient and time-consuming. A manual bookkeeping system relies heavily on human operators for inputs and is error-prone. If you are still using a manual system, now is the right time to switch to a cloud-based accounting software. Accounting software can process tons of data. It requires little or no input from a human operator and can help prevent costly manual errors.

Track Business Expenses

Keep track of business expenses, especially the ones you plan to claim when filing your return. The IRS requires businesses to preserve receipts for business expenses of $75 or more for at least three years. When recording cash payments, make a note of which customers paid, so you don’t chase them for payments later, which can be an embarrassing situation.

Stay on Top of Tax Deadlines

Small business owners wear many hats. With so much on their plate, it is easy for small business owners to miss tax deadlines. A missed tax deadline can result in a hefty penalty. To keep track of tax deadlines, set reminders. Sync your cloud-based calendar with the tax calendar for businesses on the official website of the IRS so you never miss a deadline again.

Outsource Your Bookkeeping If It Feels Too Hard to Handle

Bookkeeping is tedious, complex, and time-consuming. If you decide to do your own bookkeeping, your employees may feel overwhelmed by their workload and may struggle to focus on their key result areas.

Instead of trying to do your bookkeeping in-house, outsource. A bookkeeper near you in Santa Rosa can manage all bookkeeping tasks so your employees can make time for their most important tasks. A good bookkeeper follows best bookkeeping practices and is likely to avoid making mistakes. They keep up with accounting trends and update their skills and knowledge regularly.

Virtual Jeannie Bookkeeping Services is a renowned Santa Rosa bookkeeping firm. Our unparalleled ability to tailor bookkeeping solutions to our client’s specific needs sets us apart from other bookkeeping companies in Santa Rosa. To make an appointment, call (707) 664-1425.