Bookkeeping Tips

As a small business owner, you can manage your personal and business finances while tracking expenses. A good bookkeeping practice will guarantee access to accurate records and provide better control over your business spending and savings.

Below are some practical bookkeeping tips that can help you stay financially organized

1. Separate business and personal finances
   Open a dedicated business bank account to separate business and personal finances. This step would simplify budgeting and accounting and help maintain a clear financial record.
2. Create a budget
   A budget can help you plan, avoid shortfalls, and be financially prepared. You can use budgeting tools to compare actual business performance against the budget and identify trends that inform better business decisions.
3. Document all expenses
   Track all purchases and payments, regardless of the expense amount, is essential. A detailed record of all transactions should be kept on a company credit card, debit account, cheque, or cash payment.
4. Keep receipts
   Receipts are necessary for expense tracking, tax deductions, and audit preparation. Many apps (e.g., Expensify, Ibotta, etc.) use smartphones to scan and categorize receipts, saving time and improving accuracy.
5. Send invoices within 48 hours.
   You should send invoices within 48 hours of product or service delivery. This step will encourage prompt payment and reduce financial strain. Always include due dates on invoices and follow up with reminders.
6. Monitor Accounts Receivable
   Account receivables can easily turn into bad debts. Use a 30-day payment window and accounting tools to track outstanding balances and send alerts automatically.
7. Perform regular reconciliation
   Regular reconciliations will prevent earlier errors associated with cash inflows and outflows, keep accurate, up-to-date records, and be ready for financing when needed.
8. Regular check-ins with your accountant
   A regular check-in with your accountant or bookkeeper provides an expert review of your business’s financial health. They can also provide financial guidance that can be used to make smarter decisions, avoid surprises, plan taxes, and reduce losses.
9. Automate processes when possible
   Automation saves time and minimizes errors. Most accounting and bookkeeping software allows for various ad hoc and repetitive automation levels.
10. Go Paperless with Cloud Accounting
    Cloud-based platforms allow you to manage bookkeeping from anywhere. They also offer automation and real-time access, making records easily accessible across different devices.
11. Outsource
    Consider outsourcing routine and time-consuming tasks like payroll and bookkeeping. Outsourcing may not only be cost-effective but also allow you to focus on more important business areas.
12. Tax Deadlines
    Set monthly reminders and funds in advance to avoid late tax filings, which can result in penalties, audits, and unnecessary stress.

Timeless Taxes and Accounting offers expert guidance on bookkeeping, accounting, advisory, fractional CFO as well as individual and small business taxes.