Every small business must have their financial books in order. Taxes, legal stipulations, and making sure you are financially stable are all reasons that there is no way around bookkeeping. Whether you are a careful bookkeeper that has a great system, or you have a pile of receipts and no rhyme or reason, a little advice can be a great help. There are many ways that bookkeeping for small businesses can be streamlined or otherwise improved; here we will look at five. If you are a small business owner looking for a little help with the books, try these tips and make this year a great year for bookkeeping.
1: Decide If You Should Get Professional Assistance
Keeping the books, managing your cash flow, and preparing for your taxes can be a major undertaking. While many small business owners are able to wear the bookkeeper hat along with their other responsibilities, for some companies it’s too much to be managed well, or at all without using a professional financial service. If you are feeling overwhelmed by doing it yourself, it may be a good time to seek assistance. There’s no harm in contacting some local financial service companies for more information. You may find that the investment is well worth it.
2: Keep Things Separate
Many small business owners make the mistake of managing their business finances and keeping accounts with their personal finances. It’s always a good idea to keep business and personal finances separate. Get a business account, use business checks or debit cards. Keep business expenses and income as a completely separate system. It makes it very difficult to track your business cash flow when mixed with your personal. This is especially true as your business becomes larger or more complex. Keeping things separate will make tracking and managing cash flow and preparing for taxes easier, and will place you in a better position you should you ever be audited.
3: Watch Your Invoices
It can be a great feeling to look at your books and see a large amount of money in the receivables column. Just remember, until those receivables are safely resting in your bank account, it will do you little good. Keep an eye on your invoices and make sure your clients and customers are paying within the terms of your agreement. Develop a plan for when clients are 30, 60, and 90 days late and stick to it. An outstanding invoice is like providing an interest-free loan. It will hurt your cash flow and profitability.
4: Determine Your Monthly Minimum Profit
Every business has monthly expenses, and those monthly expenses must be covered to remain in business. Each month, know beforehand the total amount needed to cover your expenses. Knowing the exact income you will need each month will help you to devise a plan to make sure that amount comes in.
5: Give Yourself Time
Small business owners are busy and things often come up. It’s important that you schedule time to work on your books each week. Find a time that works, put it in your planner, and make it a priority. Spending time in your books each week helps from falling behind and becoming overwhelmed. Financial records are an important part of every business; make sure you are giving them the time and attention needed to remain profitable.
If you are feeling overwhelmed and are seeking some help with your bookkeeping, a financial professional can ensure that you are covered. The professionals at Landwehr Financial Services can be a great help in navigating the financial records of small businesses. Our holistic approach ensures that we will take the time needed to truly understand your situation and make your accounting concerns disappear. Contact us today to learn more about our services and experience first-hand the level of care we give to all our clients in the St. Cloud MN area.