Bookkeeping is nobody’s favourite task, but unfortunately, it’s one that can’t be avoided. If you’re a small business, you’ll most likely update your own books, so we’ve put together some tips to make the process easier:
Always separate personal and business finances
We find that many small business owners make the mistake of confusing their personal finances with their business ones. We recommend starting a separate business account with a credit card to avoid any overlaps. You’ll also want your business to build a credit rating, which shouldn’t be affected by any personal finances.
Automate your finances
Gone are the days when we need to manually enter data onto spreadsheets. Using cloud-based software for bookkeeping is much more accurate and up to the minute. Using the cloud will also ensure that your data is backed up.
Do a quarterly review
As each quarter comes to a close, you should take a thorough look at your records and make sure they are completely up to date. You can look for significant trends such as increased or decreased sales and share these trends with your accountant. Looking at the bigger picture is essential if you want to improve or continue to be successful in the future.
Keep careful note of business expenses
You don’t want to forget to deduct any possible expenses, but you should double-check with your accountant what exactly this covers. Regardless, you should keep detailed records of any expenses that you may be able to claim back. This can be made even easier by using a business credit card for any purchases that are relevant to your business.
Plan for tax deadlines
You should always know when your tax deadlines are so you can plan ahead. Sometimes, you may need to set money aside in order to pay the bills. You can be fined if you fail to pay on time, so it’s best to avoid this.
Consider your accounts receivables
One of the best ways to avoid getting caught short is to keep an eye on your accounts receivables, as customers not paying on time is one of the biggest contributors to dry cash flow. It’s always important to get in touch with late-paying customers so you don’t lose out on any finance.
Talk to an accountant
Speaking to an accountant can make your bookkeeping much easier. Here at CWR, we can offer advice and help with all tax services, so don’t hesitate to contact us.