The new year always gives you the opportunity to reset, and commit to improving. As a small business owner, nothing is more important than your finances, and therefore, should be at the top of your resolution list in 2018. To make it easier for you to succeed, we have compiled a list of 10 bookkeeping tips which you need to make part of your routine.
- When setting up your bookkeeping, you can choose to be detailed with your account system or keep things at a higher level. Keeping things detailed (don’t overdo it) with roll up accounts gives you the best info about your business.
- Create a simple yet functional chart of accounts. Setup accounts that you NEED and nothing more. Don’t over categorize or make your bookkeeping tasks more cumbersome than they need to be.
- There are three financial statements for every business: income, balance sheet, and cash flow. These give you a summary of all business activity, which you can use to make more informed business decisions. Make sure you are reviewing them regularly.
- Always review your financial performance at least once a month. This will allow you to identify potential problems, know what’s working well, and take your business to the next level!
- Block some time in your calendar each week to avoid letting receipts and invoices pile up. Stick to the time you’ve set aside, and always put your finances first!
- Always make sure you understand your seasonal cash flow. That way, you can forecast for it and ensure your business has the resources needed to always survive the slow seasons thanks to success during the busy ones.
- Review your accounts receivable on a regular basis. Working on collecting payments helps protect your business from unnecessary losses.
- Make sure you are not paying bills too early. Delaying until due keeps cash in your bank which provides security and interest earnings in some cases.
- Comingling personal and business funds can lead to an accounting nightmare, particularly during tax season. It can also break some legal protections that protects your personal assets in the event of a lawsuit. Don’t Mix!
- Always be on the lookout for opportunities to improve. If you hire out your bookkeeping, challenge and press your vendor to give you the best, most detailed information possible.
Follow these tips during the new year and you will be successful in your bookkeeping, and in turn, successful in your business!