A business’ books is one of the most important documents you’ve got to get accurately and perfectly throughout the course of your operations. You can think of your books as your scorecard of how well (or bad) your business is doing. In simpler terms, it’s only through your books that you can have a clear and well-defined picture of your current standing.
When you’re trying to make sure your business is on top of its game, it’s important to emphasize proper bookkeeping. Whether you’re a small business or a big one, you surely can learn a thing or two about bookkeeping. If you’ve long struggled in this area, here are some pointers you can learn from:
- Keep A Separate Account Of Your Personal And Business Finances
Even if you’re running a sole proprietorship and your business is still a start-up, it’s very important to keep a separate account of your personal and business finances. Don’t mix your business bank account with that of your personal. This will only confuse you even more and make it harder for you to track your business’ cash inflow and outflow.
Moreover, when you have one bank account for both your business and personal records, you can be in danger of spending business money for personal purposes, because of the mix-up. It’s also going to be easier for you to keep track of your expenses when you know that all these expenses are truly only for your business, and not with other accounts.
- Open An Online Banking Account
Technology is on the side of so many industries today. Hence, it’s up to you to take advantage of this. Along with keeping a separate account for your personal and business finances, it’s also helpful for you to open up an online banking account so you can make and record real-time payments.
Online banking transactions are faster, because you don’t have to wait for bank reconciliation statements. Moreover, you also won’t have to wait for bank holidays, or the bank’s check clearing schedule.
If you’re also using an accounting software, there are some software that’ll enable you to sync your online account with your software. This will make your accounting process even more seamless.
- Choose The Right Bookkeeping Software
As touched briefly above, there are many accounting software you can sign up for today. An accounting software like Wave software can help reduce the onset of manual errors in accounting, as you make that switch from manual to automated. While this switch will mean a significant adjustment to your business, it’s one that’ll bring so many advantages.
- It increases efficiency, as it’ll speed up time that was previously wasted doing tedious calculations;
- It simplifies your tax filing process, as your records are now significantly more organized;
- It results in more accuracy, as this will mean fewer mistakes.
There are so many different types you can choose from, but this would generally depend on the services the accounting software offers and your needs. These can provide different levels of accounting programs, such as:
- Cashbook and ledgers;
- Cashbook, ledgers, and inventory;
These are what you’ll need for a small and startup business. But as your business expands, you’ll also need to sign up for more services. These would include accounts payable, accounts receivable, and bank reconciliation.
- Employ The Services Of A Good Accountant
Even if you’re going to have an accounting software, this will only be as good as the brains behind it, operating it. A software doesn’t operate and make calculations on its own, as this will still depend on the information that’s downloaded into the system. If the information or documents are wrong, then the software will also make wrong calculations as well.
A good accountant has all the expertise and years of lessons at the university. Beyond this, an accountant also goes through regular training, to upgrade their certification. This means that they’re also able to keep up-to-date with the latest techniques and trends in accounting.
- Organize Your Business Documents
Your accountant and accounting software’s work will also depend on the documents you have. Hence the need for you to ensure that these are all well-organized. Keeping all of these documents is important, because:
- It makes for easy tracking in the future, should there be any queries that’ll pop up regarding certain transactions;
- It constitutes proof to your auditor that specific transactions did occur.
Even when you’ve got automated software and records of all your transactions, it’s still advisable to keep all manual documents from at least five to seven years. This can help solve any problems that may arise within that accounting period.
For you to achieve excellent organization of all your business documents, the key is to have an organized filing system. This is a good foundation of a sound bookkeeping system.
When you’re able to have a good bookkeeping system, this also makes you manage your business better. As a business owner, surely, you wouldn’t want your business to close down right away, simply because you weren’t able to properly manage your accounts. Don’t commit the possible mistake of your business sinking and dying, before it even had the chance to grow and earn a profit.