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5 Bookkeeping tips for small businesses

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Mika, Staff Writer

Monday, 15 February 2021

If you were to list all of the reasons why you got into business, keeping on top of your bookkeeping probably wouldn’t rank near the top. However, bookkeeping is essential for you to be able to manage the financial aspects of your business. It allows you to track how much is coming into your business, as well as how much is leaving it.

As a small business, it can be tricky to understand bookkeeping, let alone make time for it. Here are 5 bookkeeping tips for small businesses to help you along the way. 

Start early

There’s no point in trying to scrape together something which resembles your books the day before you’re due at the accountant. This method will only lead to lots of errors on your part, not to mention stress. Ideally, you should make some time to complete your books every week. 

If you work as you go along, you are far less likely to make mistakes. That’s why even though bookkeeping isn’t the most exciting of tasks, you should never put it off. 

Keep records of every payment

Your books should show a detailed report of every financial transaction that’s related to your business. From sales to receipts, overheads to all other costs - you need to be keeping a record of everything that’s going on. 

It might seem tedious, but it’s the best way to ensure your income is accurate. Plus from a tax perspective, your accountant can only make deductions if the expenses have been recorded properly. 

Produce monthly reports

Generating monthly reports based on your books is the best way to keep up to date with your finances. Doing so will also make sure you don’t get caught out by any nasty surprises. As a minimum, the reports should include a profit and loss statement and the balance sheet. 

From here, you can create strategies to minimise any losses by reviewing your expenditure. Without bookkeeping, it’s impossible to produce accurate reports which could allow issues to go unnoticed. 

Be strict with deadlines

You should also be strict with payment deadlines with your clients. Every piece of income needs to be recorded in your books. But this is impossible if the client doesn’t pay either on time or the correct amount. So be firm with when the payment needs to be completed by, and have processes in place in the case of a non-payment. 

Outsource your books

It’s impossible to do it all as a small business. That’s why if you don’t have the time or knowledge to complete your books, it’s time to outsource them to someone who does. Professional bookkeepers will make light work of your books. They can use a variety of different accounting methods, depending on what will best suit your business.

Best of all, it will relieve a lot of stress for you as a business owner. That’s because you’ll be safe in the knowledge your books are being completed regularly and accurately. 

To sum up

Bookkeeping is the best way of keeping track of your finances as a small business. By doing so, you’ll be in a much better position to prepare for your tax bill. 

Whether you learn how to complete your books by taking a course, or outsourcing them to a professional, be sure to keep up with them. 

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