03/06/2014
5 Tips for Entrepreneurs to Keep Their Bookkeeping Up-To-Date
For many entrepreneurs and small business owners, the bookkeeping process is commonly put on the back-burner while the company struggles to find time to complete their day-to-day operations. It is simple enough to get lost in the process of daily operations as they seem to quickly outweigh the importance of reviewing the businesses finances. With that said, maintaining a clear and concise set of books offers entrepreneurs and business owners a strong understanding of their financial positioning, while allowing for them to make informed business decisions. Below are five tips that entrepreneurs and small business owners can take advantage of to make maintaining their books easier.
1. Technology is your friend
With so many tools available, why not take advantage of them! There are a number of tools available that have been designed around the bookkeeping and accounting needs of entrepreneurs and small business owners. Many companies create spreadsheets of their expenses and payables using Microsoft Excel, which is a great tool that has very little cost to the user. Unfortunately, Excel lacks a lot of the functionality necessary to maintain clear and concise books. Companies such as Wave and Xero, on the other hand, have developed applications specifically for entrepreneurs and small businesses, and offer functions that help with tracking expenses, invoicing, cost-plus hours, and other important information.
Bookkeeping and accounting technology is not limited to accounting applications. There are also a number of document management applications that help entrepreneurs and business owners to share, manage, and collaborate on their important documents. These systems allow for simple file storage, and also give users the ability to maintain an audit trail in the event of a business audit.
2. Don’t make it personal
It is a common mistake for new business owners and entrepreneurs to use the same methods of payment for personal and business expenses. With that said, it is important that you have a personal and business account that is kept separate from each other. Keeping accounts separate allows for less work down the road when you sit down to work on your books, whether personal or business. A simple way to do this is to open a business credit card with your bank and use it to pay for all of the business expenses. This allows for you to have a statement at the end of the month that includes your deductible expenses all in one place.
3. Outsource your work
Hiring and training employees is a big job when you have a small business, and has the potential to be a risky business decision as it directly affects the bank account, as well as your time. One way to overcome this risk is to outsource your job duties wherever possible. Not only do you not have to hire and train employees, it also allows for you to be worry-free about those tedious employer tasks such as annual salaries, overtime, holiday pay, and benefits.
4. Use your calendar
A great way to find time to complete a project is to mark it down on your calendar. Use a pen. Better yet – Use a sharpie! Whether it is Monday morning or Friday night, schedule 15-25 minutes each week to organize your finances and don’t let anything take you away. Taking care of your weekly finances will give you an insight into the inner workings of your business, and will offer you the ability to make informed financial decisions. Even better, by the time tax time comes, you will be worry free as you will have a firm understanding of your business and your files will be organized and proper.
5. Call a pro
Whether you do it yourself or if you enlist the help of a professional, it is important to stay on top of your books. Many bookkeeping and accounting firms allow for clients to share responsibilities, which reduces the overall rate and keeps the business owner within the bookkeeping process. These firms also offer intimate knowledge of the process, and are able to find deductions and tips that can save you money in the long run. Finally, it is always a good idea to have a professional accountant look over your file during tax season to ensure that your books have been maintained properly and you are not missing any key information.
Maintaining your books can be a difficult task, especially when there are so many daily activities that need to be taken care of. The process of maintaining your books is made easier with the various technologies available, and when done right, maintaining your books can be simple. Keep your personal and business accounts separate and set aside time each weekly where you can sit down and organize your files. If you feel that you are getting overwhelmed, call a professional. A good bookkeeper can share the bookkeeping responsibilities with you, while giving you the tips and expertise you need to make informed financial decisions.
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Article By; Wayne Zielke
Noobpreneur.com is an authoritative small business online magazine, dedicated to cover the latest tips, news, ideas and tools for small business owners.
