Bookkeeping is complex. No wonder most business owners dread the chore. Many small business owners often make mistakes when maintaining books of accounts. These mistakes could result in compliance issues or create a domino effect delivering a powerful blow.
To help you maintain your books of accounts properly, we have compiled a list of small business bookkeeping tips for your business to follow.
Create A Separate Business Account
Every small business owner should have two bank accounts – a personal account and a business account. When you open a business account, you don’t have to worry about wading through a lot of documents to find the information you need.
Setting up a business account is a great way to keep your business and personal finances separate. Then, when it’s time to do your books, you know where to look for the information you need. A business account can help the owner avoid confusion saving time and headaches.
Track Your Expenses
Use a separate credit card for business transactions.
Categorize your bills into types of expenses. A type of expense, for example, can be car mileage. Whenever you use your car to travel to a client’s location or other business-related work, note down the total distance covered under car mileage and the costs incurred.
Store paper and digital receipts properly by using file folders and binders to store paper receipts and apps and digital folders to store digital receipts.
Manage Your Accounts Receivable
Late-paying customers are a small business owner’s nightmare. Late payment can negatively affect your cash flow and your ability to meet daily business expenses. So, stay on top of your accounts receivable. Send out invoices on time. Follow up on unpaid invoices.
Stay On Top Of Tax Deadlines
Small business owners juggle multiple tasks and have too much on their plate. It is easy for them to forget tax deadlines. There are consequences for missing a tax deadline. Taxmen may slap you with a hefty fine.
To avoid last-minute confusion and ensuing chaos, set reminders. Ensure your records are accurate, so you don’t have to spend hours rectifying mistakes when filing your return.
Keep Your Records Organized
You have one less thing to worry about when you keep your financial records organized. Of course, the biggest advantage of keeping your records organized is that you can access the information you need quickly.
Set up your filing system. File everything immediately. Always reconcile receipts before filing them. Have a central location for all tax forms, receipts, and statements. Clearly label everything and keep files for the current year accessible.
Although these bookkeeping tasks are vital for small business owners, many small business owners find it difficult to accurately manage their bookkeeping while also running their business. Let Virtual Jeannie Bookkeeping Services help. We address our clients’ bookkeeping woes with customized bookkeeping solutions to fit any small business. To learn more, call (707) 664-1425.