Bookkeeping Tips for Small Businesses

Good bookkeeping in a small business is vital to say the least. You want your books to not only be accurate and up to date but also compliant with your legal obligations. If your books are well managed, it will give you the best insight into how your business is running and where you can improve. Here are our top five bookkeeping tips for your growing business.

Record Keeping

Accurate record keeping of a businesses income and expenses is critically important. Records include such things as receipts, invoices, employee information and contracts. Some documentation such as employment documents must be kept for a certain period by law. Cloud based accounting software and other services like Dropbox and Google Workspace has made it easier than ever to scan and save important records and documents. This will help you pay your taxes accurately and monitor your the health of your business.

Online Banking

You you may be surprised how many small businesses are still committed to traditional banking methods and feel apprehensive about embracing online banking. Online banking has many benefits including quick and convenient access to your finances at any given time and enables a business to make almost instant payments without relying on the hassle of raising cheques or visiting a physical bank. You will also be able to check the balance of your accounts and transfer funds with convenience.

Separation of Business and Personal Expenses

It is very important that personal and business expenses remain seperate, if they are not seperate you will be unable maintain an accurate representation of your businesses finances. Keeping these types of expenses distinct and unconnected helps to protect personal assets in the event of legal action and is also an advantage in regards to lending and debt.

Choice of Bookkeeping Software

Choosing the right type of accounting software for your business is an important decision, the right choice can offer a growing business the best options as its needs change over time. Small business owners will often begin by recording and tracking their accounting information using Excel because it is affordable, familiar and highly customisable, however many businesses now start their bookkeeping records using cloud based software such as Xero or Myob because of the ability to use them remotely, work in real time as well as the benefits of added security. Before choosing what is right for you, you need to consider the costs, features and what needs your particular business has currently or may need in the future.

When to Outsource your Bookkeeping

Knowing when to outsource your bookkeeping duties can be tricky, especially if you have always been the sole person responsible for all aspects of it. However, it can quickly become the most cost effective method of reducing your need to do hours of bookkeeping whilst also allowing your books to be kept accurately and professionally. Using a bookkeeper lets you focus on running and growing your business and helps you obtain a greater understanding of your businesses finances. You will be in a better position to make informed decisions about the direction of your business.

If you need help with bookkeeping, please contact us today.

Disclaimer

This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided having regard to your objectives, financial situation and needs.