Helpful Bookkeeping Tips for Your Small Business
As a small business owner, you don’t necessarily have the budge to hire an accountant. Outsourcing to a business accounting firm, like My Accounting Center, is cheaper than hiring an accountant in-house, but when you’re getting started, that may not be something you want to do just yet.
If, like many small business owners, you’d like to get a handle on your finances before handing the reigns over to professional, these bookkeeping tips can help you along.
Get a Business Credit Card
Unless you want a huge headache when it’s time to file your taxes, track every single one of your expenses. The best way to do this is to open a business credit account and ONLY use that credit card for business purchases. You’ll have a record of everything, which also makes tax write-offs easier to substantiate.
Plan Ahead for Major Expenses
Granted, you’ll never be able to predict every single expense, but you should have a business plan that includes major expenses when you can afford them so that there are no surprises. Predict seasonal ups and downs so you don’t schedule costly projects during the downs when you don’t have the money.
Save It for a Rainy Day
File on time by making sure you always have money for taxes. Save a portion throughout the year specifically for taxes. Keep track of tax deadlines on a calendar and don’t miss them!
Resolve All Invoices
When you issue an invoice, you need to make sure all steps are in place to ensure you get paid. Have late fees and/or other penalties set up to encourage on-time payments. Just because you send out an invoice, doesn’t mean billing is all taken care of. If you don’t keep a close eye on it, it could hurt your cash flow.
If It’s Not Income, Don’t Deposit It as Income
Recording deposits correctly can help ensure you only pay taxes on what you’re supposed to. Be specific about the type of deposit, whether it is a loan, sales revenue or cash infusion from a personal account. If all of it is recorded as income, you’ll end up paying taxes on more money that what you actually made.
These tips should help you keep track of your finances, but business accounting can get very complicated very fast. By outsourcing your bookkeeping, you can leave the minutiae to the professionals while you focus on growing your business.