How SMEs Can Make Bookkeeping Much Easier

Local business owners relish many things about being self-employed. However, few of them are able to safely claim that they enjoy bookkeeping. Some people find poring over spreadsheets a minor inconvenience, while others actively dread the chore.

Proper bookkeeping is important, but even if you don’t mind balancing their books, it’s easy to get sidetracked by everyday concerns as a business owner. The fact remains that you cannot put off your business’s bookkeeping forever. 

Here are some ways you can make the process more efficient for your company:

Do not co-mingle your expenses

Avoid combining personal and business expenses—this is a common mistake made by small business owners. If you do this, you could find yourself dealing with financial complications later on down the line, especially when you need to submit credit reports or file taxes.

As soon as possible, open a business bank account, and get a card for your company. This practice helps you maintain tidy books while helping your business build its credit rating.

Save your data in the cloud

Reconciling figures by hand is a time-consuming process. Enter your data in cloud-based bookkeeping software, and be sure that you have a secure backup of your business’ data online.

Bookkeeping software can sync with your business bank account, making it easy to have accurate records. Online statements are updated every minute, so you are sure that it accurately reflects activity on your account.

Consult a professional on how to streamline

Talk to an accountant and determine if you need custom accounting software for your company. Some businesses only need off-the-shelf solutions, while others have specialized functions. 

An accountant can give you advice and set up the system for your business. They can also show you how to use your software to its maximum potential.

Perform regular checkups and reviews

If you do not prioritize your bookkeeping, it’s easy to find yourself knee-deep in bounced checks and overdue invoices. Do not let things get to a point where it becomes impossible for you to add figures up. Checking your books weekly will help ensure that your cash flow is stable.

Aside from weekly reviews, it’s important to schedule quarterly inspections in more detail. Take an in-depth look at your records and look for trends. Sales performance, increases in late-paying customers, or other information vital to your overall strategy only comes to light during medium-term checkups like these. 

Record your business expenses

Consult your accountant about what expenses you can deduct from your taxes. In any case, you should be maintaining detailed records of your expenditure. Scan and create digital copies of your receipts, or always use a business card for company-related purchases.

Track employees’ hours with software

Clocking in and out of smartphones is effortless these days. When employees have cloud-based time-tracking software on their phones or computers, you’ll have that aspect of payroll down pat! Some bookkeeping software has time tracking features, so if that’s something you need, look for an option that makes the task easy for both you and your employees.

Monitor receivables and tax deadlines

Your business’ cash flow relies in part on the timely payments of customers. Keep a close eye on when you expect deliverables, and send reminders to late-paying customers. People who cannot meet payments could take an instalment plan to give you back part of what they owe.

Make sure the reverse is true for you—pay your debts on time. Set aside money for tax bills, and make sure you meet or pay ahead of deadlines to avoid fines. 

Conclusion

You need a detailed and accurate account of your cash flow to make your business succeed. If you do not watch where your money goes, you will find yourself in financial trouble even if you’re generating revenue. If you really want to understand your finances and how you can make your money work for you, you may benefit from working with a reputable accountant!

Looking for an accounting service for small businesses? We’re here to help! Get in touch with us today for a free consultation.