Want to Try Your Own Bookkeeping?

Bookkeeping is essential to running your business smoothly and though I don’t recommend doing it yourself you can implement some easy ways to get more organized with the books. One of the most effective ways to start this is to maintain and track all financial records from day 1. You don’t want to get a couple weeks or even months into running your business and realize you haven’t been keeping track. This leads to loose ends and mistakes that could seriously cost you. “When you don't have a system and processes in place, unpleasant surprises can pop-up, goals can be missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and even improve your profits, (source).”  Below are some of the best tips to look at when thinking about doing your own bookkeeping:

 

Separation: A good rule to always follow is to separate your personal and businesses finances. This is a basic tip and the last thing you want is to give a tax auditor a reason to audit both. “Learn to pay yourself first and run your business on the remaining cash, (source).”

Organization: This is probably the more important tip of them all as it’s the first thing individuals have difficulty with when doing their own bookkeeping. By developing a method for handling all your paperwork, entering your bookkeeping data in batches, actively managing your cash flow, and reviewing your bank statement and financial reports monthly you can ensure everything stays in order.

Set Aside Money: Tax season can hit small and large businesses hard and can become a serious problem if not planend for correctly.“You know that you’re going to have to pay taxes and you know when. So systematically put money aside for it, (source).”

Don’t Go Into Debt: It is extremely easy to push payments off until the next month but loans and interest can weigh heavy on businesses especially small ones. Try to run your business on existing cash flow. “Not enough cash flow to cover expenses? Figure out where to cut your expenses and consider alternative ways where you can save, (source).”

Track Your Expenses: By tracking your expenses you can see exactly where profit is spent and in which areas you can save. “Expenses can be hard to track, which means that you may be missing tax write-offs that you could have benefited from (source).” It can be as easy as tracking your car mileage to client lunches.

Still confused about bookkeeping? I strongly encourage people to take the weight off of themselves and think about the many benefits that having a bookkeeper can bring. Although these are some great tips, the time and effort you save when outsourcing bookkeeping is tremendous. Send me an email and we can discuss what would work for you, I am very open to creating the best possible bookkeeping experience. Contact me with any questions or to get started working together!

 

 

Rahul Bhatia