Each and every business, whether big or small or must have a bookkeeping system in place. Keeping accurate records will allow the business owner to stay on top of company profits and losses. 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 maybe improve your profits.
If you own and operate a business, here are a few tips to help keep your books straight and organized.
Plan for Major Expenses
Using a different banking or payment account is a great way to make expense tracking easy for the small business owner. If you need money from your business checking account for personal use, write yourself a check and deposit it in your personal account. Then spend money on personal purchases from that account. This will not only make bookkeeping easier but it will serve you well in the event of an audit.
Record Deposits Correctly
Adopt a system for keeping your financial activities straight, whether it’s a notebook you use consistently, an Excel spreadsheet or software such as Quickbooks. Another easy way is to record your daily deposit in a deposit ticket book. Generally, these books come with a white (original) copy and yellow (duplicate) copy in books of 50. For a small business, an order of 200 duplicate deposit tickets could last 2 years unless you make deposits everyday.
Keep a Close Eye on your Invoices
Assign someone in your organizations to track your billing. File all of your receipts, checks, and invoices. When issuing invoices and checks keep each in numerical order and never have any missing. If a check or an invoice is voided, write VOID on it and file it with the canceled checks or paid invoices.
Keep your Bookkeeping System Up to Date
Keep your business healthy by keeping the books up to date and monitoring records on a regular basis. Do not postpone doing it. Do it like clockwork. This practice will help you find problems and correct them before it’s too late.
Use Computer Software
Keeping track of your business’ finances is essential to profitability, so investing a dependable, intuitive accounting application is must. These applications make it easy to track income and expenses, prepare tax documents, summarize your company’s financial activities and back up records for safekeeping.