Easy and simple bookkeeping tips for small businesses
When it comes to small businesses, fully-fledged accounting processes can be a big ask. Nonetheless, you need a financial scorecard, so to speak, to keep track of your finances - specifically your income and expenses. Understanding simple bookkeeping tips and tools can facilitate this process, instead of being the time-consuming task, it may be at present.
With the right tips, your small business can power through bookkeeping and maintain more accurate financial records; a highly important aspect of your day-to-day operations.
Let's dive in and take a look at a few tips that would make bookkeeping a breeze.
Keep personal and business finances separate
Conducting business transactions through personal accounts doesn’t just make the process of keeping a track of company accounts inconvenient, but it can lead to a slew of other problems down the line as well.
Ideally, your business account should be accessible online and should be kept separate from your personal accounts, even though you may be tempted to maintain all your income in one central account.
Another issue would be maintaining accurate bookkeeping records. For instance, if the company accounts are outsourced or are processed by way of a paid bookkeeper, mixing business finances with personal accounts would increase the time taken to process your data and can lead to inaccurate records.
Maintain monthly bookkeeping reports
Many small businesses don’t realise that they are doing something wrong until it’s too late. They simply have no clue if what they are doing is working for them or not, until they find themselves in a pile of debt.
This can be avoided by following simple bookkeeping tips like keeping track of monthly reports you need to be generating and maintaining. If you are going to run a business, this aspect cannot be ignored. Bookkeeping reports provide important insights into the finances of your small business, helping you make better, more strategic decisions for you and your teams.
To start with, two of the most important bookkeeping reports are income statements and balance sheets.
These reports help you keep track of incoming accounts; i.e. receivables. This way, you can keep a close eye on what money is owed to you and keep a track of when these payments will come through. Additionally, you can also maintain a close eye on expenses including taxes.
Evaluate whether traditional bookkeeping software is right for your business
When it comes to bookkeeping, there are a host of ways you can keep track of your finances. Compared to manually updating spreadsheets, traditional bookkeeping software can meet a business’s accounting needs.
The software generally keeps track of your financial records, making it an easy task to stay on top of your sales invoices for instance.
The trouble with traditional bookkeeping software, however, is that it is usually an on-premise solution, which means data may not be updated and backed up instantly and may be restricted to only one user at a time. This makes it difficult to produce accurate, up-to-date financial reports - as and when you need them - which are necessary to make better financial decisions.
Automate your bookkeeping whenever possible
Manual record-keeping is time-consuming and the data that is held is often complicated and hard to understand. Using cloud-based bookkeeping, you can manage your business banking accounts online and your data is organised in a standardised format that doesn’t change.
This has the potential to improve the efficiency of your processes because you can sync your bookkeeping software with your business’ bank accounts.
With this simple service, you’ll be able to receive real-time, accurate, up-to-date information on your business finances, which you can access anywhere. Automating your bookkeeping also ensures that important financial information is backed up safely off-site, on the cloud.
Leverage simple bookkeeping tips to improve your financial processes
Cloud-based bookkeeping helps you perform regular financial checkups, stay on top of your income and expenses, and is far more convenient compared to traditional bookkeeping software.
At Ookkee, we’re in the business of equipping small businesses with cloud-based bookkeeping, helping you keep track of your accounts from anywhere. Staying competitive and enjoying a distinct edge is much easier when your finances are in order.