5 Bookkeeping Tips for Small Businesses

As a small business owner, you’ve probably faced more than one headache in trying to maintain your books properly. The need to keep clear and accurate records can be overwhelming, and the possibility of an audit can send even the most stoic of us into a tailspin of anxiety. Fortunately, there are a few simple ways that you can make your bookkeeping easier. Use these 5 easy tips to make your business books thrive.

  1. Go paperless

In this modern era, there’s no reason to keep stacks and stacks of paper files next to envelopes full of receipts. Do your paperwork on your computer: Use electronic invoices, scan your receipts, and save everything in clearly labeled files for your business (that are separate from your personal files). Need to find a specific transaction for a specific client? Instead of rummaging through filing cabinets and envelopes for that one elusive document, you’ll be able to do a simple search on your desktop to find everything you need.  And as an added bonus, you get kudos for saving trees.

  1. Do a daily/weekly check-in

Sometimes, whether you’re bookkeeping with paper or with electrons, important information gets lost because it slips your mind before you file it. Depending on your business, it’s a good idea to set aside time, on either a daily or weekly basis, to manage your receipts, invoices, and bills. Choosing to think about your books at 4pm every weekday, or at 10am every Tuesday, ensures that information won’t slip through the cracks, and making the event a regularly scheduled routine makes the whole process less onerous.

  1. Plan for major expenses

Too often, small business owners don’t think farther ahead than the next few months, but this can be a major mistake. When did you buy your computer system, and when is it likely to need an upgrade? How frequently do you want to enroll in extra training for yourself and your staff? These kinds of expenses come up less frequently than the usual monthly overhead, and consequently many small business owners have to scramble when a computer crashes or a major event takes place. Anticipating and budgeting for major expenses—even if it just means having a small emergency fund set up—will go a long way to building the resiliency of your business and keeping your books in the black.

  1. Set aside tax money in advance

Whenever you get a payment for your services, take out your estimated tax percentage and put it into a separate account—preferably one that generates interest.  If you owe money when tax time rolls around, you’ll already have the appropriate amount set aside, meaning that you won’t have any cause to panic.  If, on the other hand, you end up owing less than anticipated, you can use any leftover money in the separate account to re-invest in your business once taxes time is done.

  1. Go Online

In a similar vein to going paperless, online bookkeeping services have proved to be nothing short of a godsend for many small business owners. Most of these online services come with ready-made templates for things like invoices and expense reports, meaning that you don’t need to re-invent the wheel when you need to process new bits of paperwork. Often, you can automate major portions of your bookkeeping process, so that less of it is on your shoulders. Online systems can also help you keep track of your tax information, so that you won’t have any nasty surprises when IRS time comes around.

Using these 5 tips, you’ll be able to clear your mind of bookkeeping woes, and focus on the thing that really matters to you: running your business.

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