As a small business owner, we know that you have a lot on your plate. Accounting may seem like a tedious task that is easy to push aside, but if you don’t keep a tight ship when it comes to your books it can make your life extremely difficult come tax time.
Read on to learn Liu & Associate’s five small business bookkeeping tips that will keep your life smooth and simple – even during tax season.
1. Find a Trusted Advisor
Having someone you can go to for sound advice is invaluable as a small business owner. Your advisor can make sure you are handling your finances properly, answer any questions and help you fix any mistakes that might have been made.
Have a small budget? Don’t worry! There are a ton of flexible options out there to make sure you get the advice you need at a price you can afford.
2. Plan for Major Expenses
Set aside some time and map out any major expenses that you foresee happening in the next three to five years. That way, you can plan accordingly and make sure you have the finances in place beforehand. This will save you from scrambling for a loan when these expenses become unavoidable. Be sure to acknowledge your busy and slow seasons, as this will affect how much money you have available to spend.
3. Track your Expenses
Write. Everything. Down. It doesn’t matter if you chose to carry around a notebook, make a note on your phone or write it on a napkin. Keeping track of every business expense ensures that you don’t miss out on any tax write-offs. An easy way to keep track of business expenses is to have one credit card that you use solely for business purposes. This ensures you have a digital copy of all business charges, and removes the stress of having to remember to write down a charge every time you use cash.
4. Keep an Eye on Your Accounts Receivables
When things get busy, it’s easy to forget to stay on top of your accounts receivables. Without receivables, income dwindles! Make sure you have a process (i.e. a monthly report), that lists any past due payments. You’ll also need to have a process for how to handle these accounts. It may be an email, a phone call or sending a second invoice; whatever it is it will ensure you are getting the monthly payments you are owed!
5. Schedule a Time Each Week to Review Your Books
Give yourself some time to sit down and go over your finances. Doing this quick overview once a week will allow you to ensure that everything is in order, and catch any mistakes in their early stages. It doesn’t need to be a big time-drain – 30 minutes/week is generally plenty!
BONUS TIP: Bring in the Experts
Liu & Associates offers flexible and comprehensive small business bookkeeping services that allow you to focus on what really matters – running your business. If you’d like to learn more about how our small business accounting solutions can help, give our team a call today!