Bookkeeping Tips From the Pros
A solid bookkeeping system is an essential aspect of running a business. No matter how small your business is, you should make sure that your books are updated, accurate, and readily available, as it provides you with crucial information on your business’ financial standing. Check out these expert bookkeeping tips to help you along the way.
Stay Confident in Your Bookkeeping Strategy
When it comes to bookkeeping, confidence in execution is key. As small business owners who may be taking on bookkeeping for the first time, it’s essential to feel secure in your company’s bookkeeping and compliance. Bookkeeping can be an overwhelming task, but there is a proper solution for your unique needs. If you are questioning your ability to strategically guide your small business in its accounting practices, a collaborative partnership may be ideal. Especially as technology and opportunity for data analysis in accounting evolves, don’t be afraid to ask for help from an expert. For example, sometimes bookkeepers don’t do taxes or they don’t have their CPA designation, so they may choose to partner with a CPA
Use Bookkeeping to Track Performance Against Plans
One bookkeeping tip that many business owners may not think about is tracking performance against a plan. Having a financial forecast or budget, and tracking your monthly progress against that plan, should be a key part of your bookkeeping process. Good bookkeeping shouldn’t be just about knowing what you’ve done, it should be about helping you know where your business is going. Work with your CPA to build a budget and revenue forecast. Then, compare what your actual results are versus the budget, and use that information to improve your company’s performance. For example, if a particular product line is growing well and providing good margins, consider putting more market money behind that product.
Have Immediate Access to Financial Data
Find a solution that gives you real-time data. If your bookkeeping is constantly behind, it becomes increasingly difficult to make strategic decisions or analyze the health of your business when you need to most. No matter where you are in your business’ journey, immediate access to critical information like cash flow forecasts based on outstanding accounts receivable and accounts payable will allow you to make smarter choices about how to grow.
Classify Your Employee Status Correctly
Companies tend to have full-time staff, part-time staff, contract workers, or a combination of all three. Properly classifying employees and ensuring that they remain compliant with federal and state tax rules is crucial to avoid costly and disruptive mistakes at tax time.
Services for businesses
BUSINESS ADVISORY AND SUPPORT
Management Accounting and Supporting
Systems and workflow reviews
Cash flow and budgeting reporting and analytics – learn how to understand your business numbers
ACCOUNTS PAYABLE
Data coding and bank reconciliations
Data entry and reconciliation of supplier invoices and statements
Preparation of payment schedules
Generation of bank ready files for release of payments to suppliers
Remittance Advice issue to suppliers
Liaison with suppliers on query and problem resolution
Preparation of Taxable Payments Annual Reports
ACCOUNTS RECEIVABLE AND DEBTOR MANAGEMENT
Raising and issuing of invoices to your customers
Recording and reconciliation of payments received
Liaison with customers on query and problem resolution
Issue of regular statements to customers
We can follow up your outstanding debts, ensuring that cash is in your account faster!
FORENSIC BOOKKEEPING, FILE REBUILDS, AND BACKLOG WORK
Files in a mess, or needing a complete rebuild? We can work methodically through your pile of paperwork to unravel your mess and get your record keeping back on track and compliant as quickly as possible
PAYROLL SERVICES
Establishment and management of payroll records
Payroll processing (weekly, fortnightly, monthly)
Preparation of bank ready files for release of payments to employees
Superannuation reporting and processing
End of financial year Payment Summaries and ATO reporting
Bookkeeping
It’s our passion, but probably not yours. We relieve the burden and mystery of bookkeeping, empowering business owners to clearly focus on what they’re most passionate about and what they do best.
Freedom
You’re one of the brave souls who took a risk and started a business. You knew the world needed you, or at least your community. You’re a dreamer, a doer, a job creator, one of the small business owners that build the backbone of our country. You took the road less traveled.
The Journey
Maybe you worked for a big company and decided to venture out on your own. Maybe you’re now leading the family business. Or maybe you just never wanted to look back and regret not pursuing your dream. Whatever the case, you took the first step and your business has gained traction. You love showing up for work, you’re making money, and people are jumping on board to be part of the success. You’re confident in your business, but you’re not exactly sure how you got here. You’re not entirely sure where you’re headed, either.
The Problem
Now it seems you’re getting lost in the details and something has to give. Things are starting to slip through the cracks and it feels like your business is managing you. Maybe this describes you:
Stuck behind closed doors in piles of paperwork instead of growing your business.
Constantly checking your bank account to see how you’re doing.
Frustrated, wondering where all your money’s going.
Stressed by late notices or penalties and interest from missed payments.
Sacrificing more and more of your family time in order to straighten it all out.
Reasons You Should Hire a Bookkeeper
We talk to a lot of small business owners like you. What we hear over and over and over again is that you love what you do but you hate the demand of the back-office tasks. It’s one of the biggest complaints of people who decide to start their own business.
Similarly, though, most business owners feel like they can’t afford or don’t need to hire a bookkeeper. You stay in the place of pain because you think it is just one of those things that comes along with owning your own business. But that’s simply not true! The benefits of hiring a bookkeeper extend to almost every level of your business. In fact, we think it is a decision you can’t afford NOT to make.
Save Time
We mentioned this already but let’s face it: As a business owner, time is one of your primary concerns. You want to be spending less time on the clerical tasks and more time on making your business thrive! You want to be able to take a vacation, spend time with your family, and maybe even spend time working on your golf game. That isn’t just for retirement!
Reduce Errors
Maybe you’re passionate about making pies or maybe you create and sell gadgets for ukulele players. Whatever your passion, it’s probably not logging receipts, paying bills, and filing taxes. When you hire a bookkeeper that does LOVE those tasks, you can gain confidence in your numbers because they know what they’re doing and they’re doing it well. Catching errors can keep you from hassle down the road with your state or federal taxes. They can also save you from late payments, and the list goes on.
Save Money
We have already mentioned the money that can be saved by ensuring your bills and taxes are filed correctly and on time. But there’s more! Using a bookkeeping service that keeps your books up-to-date monthly means that they will be able to spot trends in your spending, catch duplicate or unnecessary charges, and point out places where your spending isn’t in line with industry trends.
THE GUIDE TO SMALL BUSINESS BOOKKEEPING
Every business needs a solid bookkeeping system to keep track of their expenses. In this guide, we will show you how to set up bookkeeping that works best for your business as well as some of the most common mistakes you may encounter along the way.
Bookkeeping vs. Accounting
While bookkeeping and accounting sound like interchangeable words, they actually refer to different financial processes. Bookkeeping is the organization of all your business-related transactions. This makes it easier when it comes time to do accounting, which is the interpreting and analyzing of said transactions.
In order to keep your bookkeeping experience stress-free, make sure you follow these guidelines when creating your financial strategies:
Create a Business Plan: Before going forward with your bookkeeping process, make sure that you have a good business plan in place. Different entities have different requirements when forming and filing taxes. Use our free Business Plan Generator to help you get started.
Set Up a Separate Bank Account: Setting up a business bank account helps you establish professionalism, protects your personal assets, and gives you access to finance professionals. More importantly, having a separate business bank account helps simplify the accounting and bookkeeping process. You can track spending, deposits, and plan business budgets. Obtaining a business credit card can also help with this goal.
Choose Method of Accounting: Your method of accounting determines how you report revenue and expenses to the IRS. There are two different accounting methods: cash accounting and accrual accounting. The main difference between the two options is the time in which you recognize your expenses and income.
Cash accounting records income when you receive it and expenses when you pay them. This means that your business would only track cash as it exchanges hands so that you can always know how much money you have on hand. However, the downside to cash accounting is that it doesn’t give a clear picture of your unpaid liabilities.
Accrual accounting, on the other hand, keeps track of earnings regardless of whether or not cash is exchanged. For example, if your business needs to pay a freelancer, you would record the expense as “accounts payable” once the service is complete, not when you actually pay them. Likewise, any incoming revenue would be recorded as “accounts receivable” as soon as the services are complete, rather than when you receive the cash.
Establish a Bookkeeping System: In order to keep up with your business finances, you must establish a method of documenting and preparing your records. You can do your bookkeeping manually (e.g. pen and paper, Microsoft Excel), or you can use an accounting program to keep track of your expenses.