Small Business Bookkeeping: Ways to Make it Work
Let’s face it. Small business bookkeeping is the last thing on your mind at the beginning of a busy week, let alone the end of a full one. It often gets pushed to the following week, with self-promises that, “Next week I will make sure I do it!”
We understand how tiring running a small business can be and know that many business owners simply don’t get jazzed about spending hours in front of spreadsheets. That’s why we offer our business bookkeeping services to accomplish this tedious task for you. However, you should know that we actually recommend that your small business bookkeeping still be managed to some extent by you.
Why? Because you will always make better decisions for the health of your business when you know exactly where every dollar is going. Here are a few tips to help you on your journey to better business bookkeeping.
5 Tips for Small Business Bookkeeping
- Make it a system. There are two factors here that are important to consider.
- Convenience – Make your bookkeeping system convenient for you. It must fit your lifestyle and your tendencies.
Always on your phone? Then go digital! There are a variety of programs and apps that are made specifically for small business bookkeeping. Perry advisors can even help steer you towards the right one for your business.
But if perhaps you have tried the digital route and it just brings more frustration, that’s fine! Stick to the paper.
Make sure you’re comfortable with the method you choose and make sure you have all supplies necessary to easily complete the task.
- Habit – Make it a habit that fits into your day, week and month automatically.
If you make fresh cinnamon rolls for your bakery and you know you must have the gooey baked goods ready by 6:00 the next morning, chances are you make the dough the night before. You wouldn’t consider not doing it because it’s part of your daily routine in order to serve your customers and make a profit the following day.
Create your bookkeeping system to follow the same principle. Set a time to do your business bookkeeping and do it no matter what. But make sure you’ve thought through the time you choose. Don’t schedule your weekly bookkeeping for Monday mornings when you’re likely to be dealing with numerous issues that resulted over the weekend.
- Separate your business and personal finances.
This is one of the most common mistakes we see in bookkeeping for small businesses.
We know it can be difficult at first to get into the habit of using a different card, depositing business funds only in the business account, etc. But you must keep them separate!
Open a business checking account with a separate credit card and don’t co-mingle your expenses. You’ll save yourself hours of stress down the road when you’re completing taxes or in the event you are audited.
- Keep good records.
We can’t stress this one enough. Make sure you record everything, from business miles to the company dinner with who was there and what you talked about. In the event you ever get audited, you will be thankful you took the time upfront to record these expenses.
The market is full of apps that make recordkeeping much simpler than it has ever been. Talk to a Perry associate for recommendations on programs and apps that would help you organize your recordkeeping.
- Automate when possible.
Yes, we said you could stick to paper if that fits you better, but really…if you could automate something, why wouldn’t you? Despite its issues, technology brings much efficiency to our lives when utilized well.
Automate bill payments, invoicing, account balancing or anything else possible. This frees up more time for you to work on your business and financial intelligence.
- Plan for Major Expenses.
We all know that businesses incur major periodic expenses whether we plan for it or not. So why not plan?
Is your business reliant upon computers and electronic gadgets? Then plan for new ones. Computers and laptops have an expected lifespan of about three years. If your employees’ devices were all purchased two years ago, you can be sure that in about a year or so, you’ll be seeing some costs associated with repairs or replacement.
Perhaps your company trucks are 10-15 years old and repairs are becoming more frequent. Start planning now for replacement vehicles, whether you buy with cash or simply provide a down payment.
Quarterly taxes, employee bonuses, relocating costs, etc. – think ahead to upcoming probable expenses and work those savings into your budget.
If you’re not sure what those expenses may be, your accountant can look back through your bookkeeping and discover a trend for those major periodic expenses.
Small Business Bookkeeping at Perry & Associates
At Perry & Associates, we help our clients successfully navigating small business bookkeeping, whether it’s simply consultation or complete management. But we keep you involved in the process. We help you develop comprehensive financial awareness in order to best serve your business and your future.
Call us today to talk to an associate about your small business bookkeeping needs.