If you own a small business, you may still find yourself at the office late at night sorting through receipts and bills, recording debits and credits, and trying to decide what to do with all the other numbers. You know the importance of accurate bookkeeping, but until push comes to shove, whether you need to apply for financing, it’s tax time, or you’re facing a dreaded audit, you can’t find time to manage your general journal.
Most business owners have been there at least once. And these are the tips and tools they used to avoid enduring that late-night bookkeeping mad dash henceforth.
Separate Your Personal and Business Finances
Co-mingling business and personal income and expenses is a common mistake in small business bookkeeping and can cause major problems. Instead, open a business bank account and get a separate business credit card when you decide to go into business. This will simplify bookkeeping and help your company build its credit rating.
Connect With a Pro
Even if you plan to keep your books in-house, a qualified CPA can help you set your accounting system up properly and keep it that way. Once you’ve entered a working arrangement, your CPA should provide a schedule of important tax and reporting dates. And they will certainly answer questions about your chart of accounts and what goes where. These essential tools will help you stay on track and compliant and make your CPA’s job much more manageable.
The Golden Rule of Bookkeeping
Debit what comes into the business. Credit what goes out of the business.
Automate Everything You Can
Use a cloud-based bookkeeping system and online banking. With the two connected, you can automatically import data into your bookkeeping system, streamlining your administrative tasks and improving accuracy.
Conduct Routine Reviews
If you’re not watching the books, you can expect problems. Make time for weekly, monthly, and quarterly reviews, and plan to meet with your CPA at least twice a year.
- Keep a close eye on your receivables to prevent cashflow problems.
- Mind those payables to protect your credit score and keep vendors on board and materials available.
- Watch employee hours to avoid unapproved overtime and employee theft.
Have A Good Strategy
A tax-planning session with your CPA early in the year or before year-end will help you know what is deductible and what is not and how to conduct your business accordingly. For expenses you plan to claim, maintain detailed records; save time by scanning and digitizing receipts. In addition, you can simplify expense tracking by strictly using a business credit card for business purchases.
It would help if you also plan for tax credits. Knowing the available credits upfront will help you take steps throughout the year to qualify for WOTC, R&D, location credits, and more.
Outsourcing Is Often Your Best Bet
With the SmartPayroll Solutions – HCM network of CPAs, we can help you find a professional specializing in your niche. And our team of qualified bookkeepers can handle the daily, mundane tasks of managing your general journal. Our account managers can assist you, so contact us today if you want to learn more.