1. Separate business and personal finances.
Co-mingling expenses and income is a common mistake in small business bookkeeping — and one that will cause huge headaches for your business in the future. Open a business bank account as soon as you decide to go through with your start-up, and get a separate business debit/credit card. This not only separates your accounts, but also helps your business build its own credit rating.
2. Ask a pro.
Talk to your bookkeeper or accountant to figure out if you can use off-the-shelf accounting software such as Xero. Professionals will be able to not only offer advice, but also set up the software for you and show you how to use it correctly.
3. Automate whatever you can.
Entering data into spreadsheets and reconciling numbers manually is so old school. Use cloud-based bookkeeping software, and do your business banking online. That way, you can sync your bookkeeping software with your business bank account so you always have accurate, up-to-the-minute records. Plus, with the cloud, your critical financial data is backed up safely.
4. Perform regular financial check-ups.
If you put off bookkeeping too long, you end up with overdue invoices or figures that don’t add up. Go over your books weekly to make sure everything is kept on track.
5. Do a quarterly review.
At the end of each quarter, take an in-depth look at your bookkeeping and accounting records. Look for trends, such as growing or declining sales, year-over-year revenues, or an increase in late-paying customers. Talk to your bookkeeper or accountant: He or she can help you look at the big picture so you’re better prepared for future capital needs such as buying new equipment or other required business investments.
6. Keep records of business expenses.
Consult your accountant for guidance on what kind of expenses you can deduct in your business. For anything you think you’ll be claiming, maintain detailed records; save time by scanning and digitising receipts. You can also simplify expense tracking by always using a business bank card for business purchases. We love HubDoc and Xero here, perfectly designed for you to keep records on the go and with ease.
7. Monitor your employees’ hours with time tracking software.
Cloud-based time tracking software allows employees to clock in and out on their smartphones, tablets or computers. But it doesn’t just save them hassles—it also makes your life easier by automatically tracking overtime etc. You can find time tracking software designed for just about any industry. Choose one that works with your bookkeeping software, and payroll, helping to streamline admin within your business. We love Tanda as it handles all of your staff and payroll functions together.
8. Keep a close eye on accounts receivable.
When customers don’t pay on time, your business’s cash flow can dry up fast. Pay attention to when your receivables are due and contact late-paying customers right away to nudge them along. Even if a customer is having financial problems, you may be able to set up a payment plan to get at least some of what you’re owed. Cash flow is vital for small businesses, and to keep on top of outgoings, you have to have strong control of your income.
9. Stay on top of tax deadlines.
To avoid getting caught short, plan ahead and set aside money for any anticipated tax bills. Talk to your accountant or bookkeeper about how much to plan for. Pay on time so you don’t face fines. Set reminders in your calendar a week or two before a payment is due.
10. Never be scared to ask for help or advice
If there’s something you’re unsure of regarding your bookkeeping or accounts then do not hesitate to reach out for advice, there’s almost nothing that we haven’t seen or been asked by a client before and asking the question can save you a lot of time and help to keep things on track. Remember your bookkeeper is there to support you and your business to succeed.
Get in touch with the team at Vital Accounts on 03 9087 7889 for help with all things bookkeeping!
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