Running a small business can be time and attention consuming. We often feel like we aren’t focused on our core business functions and are instead working long hours on tasks we might be able to outsource. Entrepreneur Magazine offered Five Bookkeeping Tips for Business Owners with which we agree and add a few of our own. If your business isn’t in a financial position to hire a small business bookkeeper like BASC Expertise, we can offer tips to get you out of the office and back to business.
At BASC Expertise we want you and your business to be in top condition and offer the following 10 bookkeeping tips for small business owners:
1. Put the numbers on paper not in your head. In today’s age of stealing electronic information and identities we understand how you may not want to write anything about financials, taxes or best practices of your business. What if something were to prevent you from being able to run your business? The business could still operate and generate income for you and your family if key business information were written.
Similar to personal information, writing the names of insurance, payroll, landlord, banking contacts and the location of key paperwork is important. Consider a deposit box at the bank for all key documents. Be sure someone has the key or access to the person at the bank who can get to the documents.
2. Use software such as Quickbooks to track income and expenses. This will save you and your CPA or tax preparer countless hours when it comes to running reports and paying taxes. You will always have the pulse of the financial position of the business when you are tracking via software.
3. Plan big purchases so you are using less credit to run the business. In today’s uncertain economic climate it is in the best business interest to limit the use of credit. In any economy it is important to plan big purchases so less money is spent renting equipment and/or paying interest. Having cash on hand will keep your business debt-free and closer to expansion should you choose to go that route.
4. Save money for unplanned expenses like taxes. You always want to be able to pay Uncle Sam or else suffer paying penalties and interest.
5. Pay bills on time so when you need a business line of credit you have a good credit rating.
6. Work with professionals to develop a business plan and determine the most appropriate tax status for your business.
7. Separate personal and business banking accounts. This simplifies expense tracking and will save time and money at tax time.
8. Use business credit card for business purchases and pay it off monthly. Don’t spend business cash on interest. Save the cash for business expenses.
9. Track expenses that can be split between personal and business. These expenses include cell phone, internet, rent and travel expenses.
10. Pay attention to your money and balance accounts weekly, run reports monthly so you always have your pulse on the financial health of your business.
Do you have tips on bookkeeping for small business owners? We would love to hear from you. If you have specific questions about your business please make an appointment and we can help!