Bookkeeping Tips for Small Business Owners

Keeping track of bookkeeping tasks can be challenging for small business owners. Implementing a proper system can help maintain accurate records and control over business finances.

Today I’m going to explain some useful tips for you to manage your books.:

1.      Separate Business and Personal Banking: Open a business bank account to manage expenses separately, which simplifies accounting and tax filing. Although you may think it’s easier to run everything from one account, it’s not.

2.      Track Cash Payments: Although you may not use cash often, when you do, be sure to properly account for all transactions so you don’t miss any deductions.

3.      Keep Your Receipts: Save receipts to support your claim for deductions in the event of an audit. Although you can use physical storage, I recommend an online method for easy organization.

4.      Go Paperless with Cloud-Based Bookkeeping: Use online accounting software for easy access to financial documents from anywhere. This also makes it easy to collaborate with a bookkeeper if you decide to offload this work.

5.      Understand Financial Statements: If you are using an accounting system that generates financial reports, be sure to regularly review them to track cash flow, assets, and liabilities. This helps to identify patterns and make informed decisions.

6.      Know Your Operational Costs: Understand the costs required to run your business to identify issues early and update your budget accordingly.

7.      Prepare for Large Expenses: Save for future costs such as equipment purchases or maintenance to avoid financial surprises. For instance, I have a purchase I must make annually for $15,000, so I put money into a separate account twice a month so by the time the payment comes due, I’ve saved what I need to pay for it without worry.

8.      Send Invoices Promptly: Be sure you invoice clients consistently, ideally within 48 hours of delivering goods and no less than monthly for the services you’ve provided.

9.      Keep Track of Accounts Receivable: Ensure timely payments from clients to maintain healthy cash flow. 

10. Schedule Bookkeeping Activities Regularly: Incorporate bookkeeping tasks into your routine to keep records updated. Whether your review daily, weekly, or monthly, be sure to keep accounts reconciled and verify you are posting all transactions.

11. Know When to Outsource: Consider hiring professional bookkeepers if managing tasks becomes too time-consuming, or you don’t enjoy doing it. Use payroll services to handle paycheck issuance, tax withholding, and return filings. You may think you are saving money by doing it yourself, but the peace of mind you’ll have knowing everything is being taken care of is worth the cost and frees up your time to do things you enjoy.

12. Remember Tax Deadlines: Set reminders for tax deadlines to avoid penalties and stress. Whether business licenses, estimated tax payments, or payroll tax, knowing due dates and paying timely is imperative.

If you realize you need help maintaining your bookkeeping or handling your payroll processing, we are here to help! Call us at 310-534-5577 or send a message to contact@abandp.com. We’ll get some information to determine the best solution for you!