Staying on top of your business financials is the key to preventing backlogs, avoiding costly errors, alleviating stress, and staying prepared for audits and other unexpected challenges. Yet, this is easier said than done for most businesses. Here are five professional bookkeeping tips that will help you simplify your financials.
To learn more and to get started getting your business financials on track, contact the experts at Bookkeeping For You. Serving small and medium-sized businesses nationwide with a wide range of small business bookkeeping services, we look forward to helping you ensure you are getting the most from your financials.
Five Professional Bookkeeping Tips to Simplify Business Financials
Instead of waiting for the tax season or the end of the year to follow up on invoices and balance your books, set aside time each day and week to take care of these tasks. Keeping track of bookkeeping tasks regularly can help avoid issues from piling up, leaving you to catch up on bookkeeping. The following are some tips that all bookkeeping professionals will agree that you should be following regularly:
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- Keep your business and personal accounts separate: Separate business accounts from personal accounts is particularly important for sole proprietors and freelancers. You can file to become an LLC (limited liability company) that mandates separating your personal finances from business financials. This way, your personal assets will be protected if a client or vendor sues you. You should also use a separate debit card or bank account for purchases and payments. By keeping accounts separate, all business transactions conducted via checks, online payments, and cash are reflected in your business account, simplifying your bookkeeping.
- Document all expenses and revenue: One of the most important professional bookkeeping tips is to record all expenses, regardless of their size. Keep a record of all payments and transactions whether you use your debit account, company credit card, cash payment, or check. Additionally, download and save monthly bank statements to easily verify your transactions. Save all receipts and create a storage system and a protocol for naming receipts, invoices, and records.
- Track account receivables: Knowing when the money owed is paid is crucial to understand its impact on your cash flow. You can use accounting software to enter all invoices with payment dates. Review this section each week to see what is due, what has been paid, and payments that are past their due dates. While you can email or call the clients to follow up, having a collections team will help you manage due payments.
- Monitor cash flow: Tracking the cash inflow and outflow is key to ensuring you have enough cash when you need it the most. Many professional bookkeeping tips recommend that you create a receipt using a receipt book when you receive cash payments and keep a record of the same. Alternatively, you can make use of cloud software to record cash flow.
- Review your finances: Establish a weekly, quarterly, and yearly date to review your bookkeeping and business financials. An important professional bookkeeping tip is to reconcile your books with your bank accounts every month. Regular account reconciliation services will help you spot errors linked to cash inflows or outflows earlier and improve the accuracy of your records.
Outsource Your Bookkeeping to a Professional Bookkeeper
Despite the best efforts, the admin work related to proper bookkeeping often takes away your focus on your core business functions that are your top priority. At Bookkeeping For You, we excel in managing your business financials proficiently with a complete range of professional bookkeeping services, freeing up your time to focus on your business goals.
From tracking accounts receivable, cash flow, and bank reconciliation to accounting software implementation, we offer end-to-end, superior bookkeeping solutions. Contact us today to learn more about our professional bookkeeping services and get started working with us for your small business bookkeeping needs.