Businesses exist to make a profit. Therefore, you must keep good records of any money you make. The government wants this documentation at the end of the year. Unfortunately, this is really challenging sometimes – to the point you find yourself struggling to balance your books each month. So, follow these five bookkeeping tips to stay on top of it.
Some bookkeeping tips will help you keep better records.
- Make sure you differentiate your personal and business accounts. This makes it easier when it comes to tax time since you aren’t confused by having everything in the same account. Another important division is between your sales and purchases. You must divide these so you’re not confused when you go through them again.
- Record everything and throw nothing away until you’ve scanned it into your computer. Set up a way that’s easy for you to refer to as necessary. Instead of letting everything stack up, take a few minutes to do this each day. While you’re at it, also make sure you deposit any cash or checks you receive into the bank daily. This way funds aren’t lost or stolen, and they’re recorded in a timely fashion. By making this part of your daily routine, you’ll make sure your books are kept up-to-date.
- While you may not think twice about your petty cash, it’s important to keep receipts so you can record them.
- Regardless of how much you like a customer, you must still demand they pay you on time. Failure to do so means you’ll also run late on making your payments, resulting in ruining your business’ good credit, which you don’t want.
- Always plan tax payments in advance so you don’t panic at the last minute. To do so, save 20% of your monthly income for taxes. You should also set aside another 20% for unexpected expenses.
If you’re an entrepreneur or small business who feels they could benefit from having some help with their bookkeeping, contact us. We’d love to help you with this so you’re free to focus on more important parts of your business.