As a small business owner, it is crucial for you to practice the right bookkeeping practices. If you maintain good financial records, it will make it easier for you to manage your company’s debts, direct deposits, and items you sell on credit by recording and utilizing invoices. In the absence of good bookkeeping in Santa Rosa, you will end up bankrupt even before you can make your investment grow. Below are some practices that bookkeepers in Santa Rosa suggest every business owner consider when maintaining their own bookkeeping.
Separate Business and Personal Expenses – It is important for you as a small business owner, to have a dedicated business bank account for savings and checking as it saves you time and energy when it is time to tally your deductible business expenses. Right from the start, get used to maintaining different bank accounts for personal and business purchases. If you are contributing money from your personal assets towards your business, it is important to document the contributions.
It is also wise to maintain a dedicated business credit card aside from a bank account as this will help you limit the company from legal exposure to debts if you run an LLC. In summary, you must not deduct any personal expenses on your business tax returns. If you are using assets for both business as well as personal use, for instance a home, office or car, then you must consult a bookkeeping service to get expert advice on how to file your taxes. Failure to do so can lead to penalties as high as 75% of the tax amount you owe.
Carefully Track Your Business Invoices – This is yet another important aspect to bear in mind when you run a small business. Any unpaid or late invoices will affect your cash flow. It is therefore quintessential to log and monitor all your business invoices and ensure that your clients do not hold off paying you for long. You can ensure a smooth cash flow by making sure that your clients cannot place a new order until they have cleared their existing dues. You may also impose a penalty, if payment deadlines aren’t met.
Allocate Time to Review Your Bookkeeping – Any successful business owner will tell you how important it is for you to review your books every week. This is essential for your business to stay up to date. Allocating a few hours every week will also help you become more familiar with your expenses and help you manage your company’s cash flow more efficiently. Use a few hours each week to monitor your expenses, income, and track down and resolve any issues that may crop up during the week.
Store Financial Records Safely – Last but not least, be sure that all the documents you use to record your day-to-day business transactions are stored safely and securely. This is important as you need these records for future reference. Store all bank statements, credit card statements, receipts, invoices for sales, and balance sheets safely. This will surely help your company in more ways than one.
If you are looking for a company that offers bookkeeping in Santa Rosa, Virtual Jeannie Bookkeeping Services Inc. is the right choice for you. Call us today at (707) 664-1425 to learn more about our services and how we can help your business.