5 Bookkeeping Tips For Small Business Owners

No matter the size of your business, it’s imperative that it has a strong grasp of bookkeeping. Bookkeeping, of course, is the practice of recording all of the financial transactions that take place within a company. We’re talking about all purchases, sales, receipts, payments and any other transaction that could be considered either an earning or an expense for the business.

Naturally, there are many benefits to having a solid bookkeeping system. Not only does it give you a clear and honest perspective of your company’s financial viability, it also gets you well prepared for tax season. As you know, it’s tax season right now! Here’s hoping you’ve been able to practice some good bookkeeping techniques in order to adequately prepare your tax accountant.

Here are five top bookkeeping tips for small business owners:

1. Separate your personal finances from your business finances.

It should go without saying, but be sure to separate your personal and business finances. It all starts with your bank accounts. You should already have a business account that’s separate from your personal bank account. This includes having two different bank cards which should be used appropriately. All business expenses go on one card while the other is reserved for personal use. Scanning the bank statements of each account should help to organize your bookkeeping process.

2. Keep all receipts regardless of the expense.

Keeping that last tip in mind, avoid the all-too-common “no thanks” response to the “Would you like your receipt?” query. Even the smallest of expenses should be kept on file. We’re talking about all debit card, credit card and cash payment receipts. This way, you can have the most accurate of accounting records which will benefit you come tax season.

3. Create a filing system to keep all of your records organized.

As you can imagine, keeping organized is incredibly important. With so many receipts, invoices and other documentation being produced throughout the course of a year, it’s wise to ensure that they are all neatly filed. That way, you won’t have to scramble during tax season in order to locate all of the necessary documents you need to file your tax return. Maintain a proper filing system that organizes documents by a system of your choice. (eg. alphabetical, by client or by date).

4. Stay on top of all due dates.

Create a monthly schedule for all of your payments and be sure to stick to it. It’s important to remember your deadlines for such expenses as payroll, credit card bills and income tax filing. The last things you want is to incur unnecessary interest charges and/or stand to impact your business and personal credit history because you’re not being mindful of when your payments are owed.

5. Take advantage of cloud accounting.

In our last blog, we highlighted many of the benefits of cloud accounting. It helps to significantly reduce the time spent in organizing physical pieces of paper in order to ascertain your profit margins or your losses. The internet provides us all with a wonderful opportunity to make bookkeeping easier than ever.

At Platinum Tax and Bookkeeping, we offer cloud accounting expertise that we’d be happy to put to work for your small business! For more information about our bookkeeping services, please don’t hesitate to contact us by calling 1-888-675-3528 or by visiting our Contact page and filling out our form!