There are so many things to do when it comes to handling your new business bookkeeping requirements. Documenting all expenses, deposits, and withdrawals can be stressful. The good news is there are some ways to streamline the process.
Read on as we’ve come up with a list of bookkeeping tips for new business owners like you.
6 Bookkeeping Tips for New Business Owners
1# Make a plan for significant expenses
Planning for major expenses is essential in running a business successfully. You’ll less likely miss any business opportunities as long as you allocate your funds into important channels. Here are some examples:
- Note all important events such as computer upgrades in your calendar ahead of time so you’ll be reminded of when it’s coming and you’ll have time to prepare for it.
- Consider the seasonal ups and downs of your business so you can better plan for it. After all, you don’t want to find yourself short in the slower months because you’ve spent money during the flush periods.
2# Track all your expenses carefully
As an entrepreneur, it’s paramount that you track all your expenses. Surely, you don’t want to find out that you’re spending money on something that doesn’t benefit your business at all. You may use whatever record keeping tools that suit your company. Here are a couple of tips:
- Save and keep all your receipts and make sure you know what these receipts are for.
- Don’t forget to list down all your business trips, coffee dates, lunch dates, and other business events in your planner. Doing so will help you substantiate your expenses in case an audit takes place.
3# Set aside money for taxes
If you fail to file your quarterly tax returns, the Internal Revenue Service (IRS) will impose interests and penalties. Here are some tips:
- Never forget to set aside a portion of money throughout the year to pay for taxes.
- Write down the tax deadlines on your calendar together with the amount of time you need to prepare for it. That way, you can make sure that payments will be made as they become due.
- Pay attention to your payroll taxes if you don’t want to deal with serious problems later on.
- Take care of your employees by covering payroll taxes. The IRS may penalize your business if you do not fulfill this responsibility.
4# Note every money you earn and your deposits
Starting up a new business also means you have to track every money you make including the deposits carefully. Manage your money well by doing the following:
- Adopt a system such as an Excel spreadsheet or software like QuickBooks to document your financial activities.
- Record all relevant financial information – from the amount you earn to where it came from.
- Record all the deposits you make in your bank the year and what these deposits are for.
- Note all loans, revenue from sales, cash infusions, and savings. Be careful with these items as your bookkeeper may consider some deposits as income and you end up paying more taxes.
5# Monitor your invoices
Late and unpaid bills and other expenses may have a significant impact on your cash flow. Thus, it’s best to appoint someone in your company to keep an eye on your invoices and track your billing.
From there, you can establish a process for the issuance of a second invoice, the imposition of extra fees at specific deadlines, and the making of phone calls to your customers. Remember, your cash flow will suffer if you lose focus on every invoice you send to your customers.
6# Hire a bookkeeping service provider
Seeking professional services can make a big difference in keeping up with your bookkeeping requirements. Aside from taking care of the bookkeeping tasks for you, experts such as Balancing Books Bookkeeping can also give you sound advice regarding your business financials that no tool or software can provide. But before signing a contract with a bookkeeping service company:
- Consider factors such as the company’s years of experience in the industry, client reviews, and the types of services it offers.
- Contact some of it previous clients and ask them about the company’s workmanship.
- Check the company’s website and look for both positive and negative reviews.
By doing all of these, you’ll get a general idea of how the bookkeeping service provider works with businesses like yours and you can determine if it can satisfy the bookkeeping needs of your business.
As a new business owner, it’s imperative that you implement proper bookkeeping. Having good financial records means you can handle your money properly. Take the time to follow the tips above so you can achieve financial success in no time!
Author: Sarah Morris