Bookkeeping is an essential function of any business, and without strong accounting procedures in place, you risk IRS audits, going into the red or even going out of business. To keep your business moving forward and to prevent financial disaster, there are a few hacks you can use to get your business accounting practices in order. They are:
- Track Your Expenses: Too many business owners make the mistake of only keeping track of their major expenses, but small expenses like gas and office supplies add up. By tracking your every expense, you can visually see where your money is going, and make determinations about where cuts can be made.
- Keep Tabs on Labor Costs: Labor costs are undoubtedly a business’s greatest expense. Keep track of how much you’re paying employees, and not just in salary, but in bonuses and overtime as well.
- Follow Up on Invoices: Though most people are pretty good about making timely payments, some either forget about a payment they need to make or purposely avoid it. By keeping tabs on what is owed to you and following up on customers, you can make sure to collect what is rightfully yours.
- Record Deposits: Don’t just keep the bank receipts, but actually have a system in place in which you record deposits as they’re made.
- Separate Your Personal and Business Expenses: As a small business owner, it can be tempting to put a night out on the company card, or to use the business gas card to fill up your own tank. Don’t do this, as it makes it more difficult for you to deduct expenses correctly and could lead to an audit for shady business accounting practices.
- Plan for Major Expenses: There are going to be times when you need to invest in a large cash purchase. Plan for those times, and keep an emergency fund.
- Maintain Strict Inventory Records: Lost inventory, theft and damaged items account for a large part of unaccounted for money in many businesses. By keeping strict inventory records, you can visually see how much money has been lost and how much more is to be made.
- Make Time for Your Books: Set aside a few hours each week to organize your books. This can help you make sure that receipts don’t get lost or paperwork forgotten about.
- Know When to Pay: Whether you’re the owner of a small business or the CEO of a multi-million-dollar corporation, you can always benefit form a professional bookkeeper. Running a business is a lot of work, but so is business accounting. To make sure nothing gets missed, know when it is time to call in a professional.
Finances are the backbone of any business. Keep yours in order to make sure that your business has a bright and lucrative future.