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Small Tips For Effective Small Business Bookkeeping

Updated: Jul 20, 2022

If you’re running your own small business, then you know that there are many complex numbers to keep track of. From payroll and sales tax to profit margins and invoice due dates, the list goes on and on. If you’re struggling to manage all of this while keeping up with the rest of your day-to-day responsibilities, then it might be time to get an outside bookkeeping service on your side. Not only can these experts help you save valuable time, but they also help protect your finances from errors or even fraud.

1) Get On Top Of Your Cash Flow

If you’re a small business owner, chances are you deal with cash flow regularly. If not managed correctly, it can hurt your business. So here are four tips to help keep your finances in order and get on top of your cash flow:

Track Income and Expenses – Keep track of all income and expenses at all times. Otherwise, you may find yourself asking how much money you made on a particular job without knowing what expenses were incurred during that same period.

Plan for Future Cash Needs – Set aside funds for future needs such as paying taxes or payroll. You don’t want to be caught short when these bills come due.

Pay Bills Promptly – It doesn’t matter if you have enough money to pay your bills if you don’t pay them on time! Be sure to set up automatic payments so they go out on time every month.

Know When To Hire an Accountant – While many businesses can do their own bookkeeping, hiring an accountant is often necessary for more complex businesses.

Hiring an accountant gives you someone who is familiar with your industry and knows exactly what information to look for when conducting financial audits. This will allow you to focus on running your business instead of worrying about accounting details.

2) Create A System You Can Stick To

In a perfect world, you’d have someone else manage your bookkeeping. In reality, however, most small business owners manage their finances. To make sure you stay on top of things—and don’t let your bookkeeping fall by the wayside—create a system you can stick to.

Ask yourself:

1. How often will I record transactions?

2. Where will I store my financial documents?

3. How much time do I want to devote to my books each week?

These are just some of the questions you should ask before creating a plan that works for you.

3) Consider Online Help

Although it is easy to conduct bookkeeping on your own, you may want to consider outsourcing it. If your small business has grown and has several employees, then you will need proper bookkeeping services. However, if you are starting with a limited number of clients and employees then you might be better off handling bookkeeping yourself until your business grows enough to warrant hiring an accountant or a firm that offers quality small business bookkeeping services. It all depends on how much time you have available for conducting your bookkeeping and whether or not you feel comfortable doing it. There are many advantages to using online help such as time-saving, accuracy, convenience, and cost-effectiveness.

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