Keeping your accounting house in order is a great holiday gift for any small business person.
And these accounting tips can help you do just that.
Keep personal, business finances separate
Keeping your business and personal finances separate will make accounting a much simpler task, even when all your income comes from the business.
“Doing this will save you a great deal of time and energy when sifting through your expenses, because you won’t need to filter out any personal purchases you have made. It’s also a good idea to have a separate bank card for your business, so when you’re going through your invoices and receipts, you will know that all the expenditure has gone on business-related items, helping you to speed up the bookkeeping process,” writes Steve Pritchard of Cuuver.
Don’t tolerate deadbeats
It’s a fact of life in business that not everybody pays on time. But carrying someone who owes you money for too long can damage your business.
“Seeing a large amount in the receivables column is a good thing, but the money doesn’t really count until it is in your bank account. Don’t let clients avoid regular payments. Stand firm and insist you receive payment for past orders before letting them have more materials or services. The receivables department is crucial in keeping your company afloat. It may make sense to improve your invoices or to update your billing and invoicing software,” according to Business.org.
Keep up with bank statements
Online banking is great. But you’ll want to keep up with your statements anyway.
Writes Paula Welsh of 7 Charming Sisters: “Way back when starting my first business, I was using QuickBooks and religiously recorded every expense. However, I was busy and kept putting it off until 6 months went by. Finally, I had 6 months of bank statements and bookkeeping to reconcile. Of course, as the best lessons are the ones you learn the hard way, I had a ton of mistakes: entering $1000 instead of $100, transposing numbers, a few forgotten items. And of course, this all affected my bottom line. Moral of the story: whether you are using a bookkeeping software or doing it by hand, consistently reconcile your bank statements.”