As someone who runs a business, I am hopeful that one day I may grow large enough to hire employees and need to take care of the more complicated aspects of business. For now, though, my bookkeeping is pretty simple and straightforward, and the more complicated parts, I leave to my accountant.
For those who run businesses, here's some ideas from a reader on how to improve your bookkeeping.
Bookkeeping is certainly one of, if not the, most important part of a business. When your financial records are not organized, not easily accessible, and doesn't constantly update, your business can go haywire. Whether you are doing bookkeeping for a business or for a household, knowing how to create a solid system for your cash flow will help you in all financial aspects.
Bookkeeping is not an easy task and needs a lot of time and attention. It also requires rigid accuracy and an understanding of basic accounting. Many times, bookkeeping is merged with accounting, in the sense that money earned and paid can be analyzed to make critical decisions. Assets, liabilities, and equity are used in both, with bookkeeping basically related to identifying, measuring, and recording financial transactions. Depending on the nature of your business, you have to pay employees, vendors, contractors, lenders, taxes, and a lot more. Literally, every cent made and every cent paid must be recorded.
Keep reading to know how you can enhance your bookkeeping system so that the numbers of your business or household are always ready at hand when you need them.
Track performance against plans
A good bookkeeping system should also include what you plan to do and not only what you have already done. Having a financial forecast will help guide your future plans and show if they are feasible or not in terms of your financial status. Have a budget and revenue forecast set up. Then, compare what your actual results are, versus the budget, and use that information to improve your company’s performance. Say you have a product performing well, making good profits, you can put more of the budget behind it.
Real-time access
Businesses need to make quick decisions sometimes. There’s no time to go through old records. You won’t be able to make current decisions, let alone future decisions. You need to be able to access from anywhere at any time.
Automate what you can
As technology continually advances, it enters into every industry one way or another. Bookkeepers and business owners can benefit much when they automate as much as they can. We learned from the experts at Digital-Invoice-Template.com that automated invoice templates is one aspect that is going to save you time from the tedious tasks in bookkeeping. Automated invoices are easy to use and you can present your clients with a professional invoice design; automatically charge late fees, and send payment reminders; adjust language and currency; accept online payments; and are mobile friendly.
Accounting work
Bookkeeping has gone through a lot of changes in how operations are carried out. New software has changed the way things are done. For instance, bookkeeping software can give you a financial statement which, traditionally, was only something that accounting does.
Mark it on your calendar
Procrastinating is the arch enemy of bookkeeping. Basically, nothing in business should be left until you get around to doing it, especially your financial records. If too much time lapses between each time you upkeep your records, you could easily forget about certain, especially smaller, transactions. In such cases, you would need to go back and check each transaction again. No one has to tell you how slow and time consuming that would be. Make a steady schedule on when to do your bookkeeping and stick to it, whether you do it on a daily, weekly, or monthly basis.
Classify your employees
When it comes to taxation, be aware that different employees have different taxation regulations. You have to classify if your employees are full-time, part-time, freelancers, or independent contractors. Only your full-time people are considered staff and follow a set of rules and regulations, different than others who you may have contracted.
Categorize personal and business expenses
It happens often that your personal expenses get muddled with business expenses. This could be in small things like petty cash, but if your personal and business accounts are not separated, it can cause you major headaches in the future. Your business account needs to be totally separate from your personal account. Always avoid co-mingling of funds.
Healthy business finances begin with good bookkeeping. As a business owner, you want to spend less time in keeping financial records clean and clear and spend more time growing your business. No matter the size of your business, you still need a financial system that is easy and generates high-quality reports for you and your clients. With proper bookkeeping in place, companies can effectively manage their cash flow.
For those who run businesses, here's some ideas from a reader on how to improve your bookkeeping.
Bookkeeping is certainly one of, if not the, most important part of a business. When your financial records are not organized, not easily accessible, and doesn't constantly update, your business can go haywire. Whether you are doing bookkeeping for a business or for a household, knowing how to create a solid system for your cash flow will help you in all financial aspects.
Bookkeeping is not an easy task and needs a lot of time and attention. It also requires rigid accuracy and an understanding of basic accounting. Many times, bookkeeping is merged with accounting, in the sense that money earned and paid can be analyzed to make critical decisions. Assets, liabilities, and equity are used in both, with bookkeeping basically related to identifying, measuring, and recording financial transactions. Depending on the nature of your business, you have to pay employees, vendors, contractors, lenders, taxes, and a lot more. Literally, every cent made and every cent paid must be recorded.
Keep reading to know how you can enhance your bookkeeping system so that the numbers of your business or household are always ready at hand when you need them.
Track performance against plans
A good bookkeeping system should also include what you plan to do and not only what you have already done. Having a financial forecast will help guide your future plans and show if they are feasible or not in terms of your financial status. Have a budget and revenue forecast set up. Then, compare what your actual results are, versus the budget, and use that information to improve your company’s performance. Say you have a product performing well, making good profits, you can put more of the budget behind it.
Real-time access
Businesses need to make quick decisions sometimes. There’s no time to go through old records. You won’t be able to make current decisions, let alone future decisions. You need to be able to access from anywhere at any time.
Automate what you can
As technology continually advances, it enters into every industry one way or another. Bookkeepers and business owners can benefit much when they automate as much as they can. We learned from the experts at Digital-Invoice-Template.com that automated invoice templates is one aspect that is going to save you time from the tedious tasks in bookkeeping. Automated invoices are easy to use and you can present your clients with a professional invoice design; automatically charge late fees, and send payment reminders; adjust language and currency; accept online payments; and are mobile friendly.
Bookkeeping has gone through a lot of changes in how operations are carried out. New software has changed the way things are done. For instance, bookkeeping software can give you a financial statement which, traditionally, was only something that accounting does.
Mark it on your calendar
Procrastinating is the arch enemy of bookkeeping. Basically, nothing in business should be left until you get around to doing it, especially your financial records. If too much time lapses between each time you upkeep your records, you could easily forget about certain, especially smaller, transactions. In such cases, you would need to go back and check each transaction again. No one has to tell you how slow and time consuming that would be. Make a steady schedule on when to do your bookkeeping and stick to it, whether you do it on a daily, weekly, or monthly basis.
Classify your employees
When it comes to taxation, be aware that different employees have different taxation regulations. You have to classify if your employees are full-time, part-time, freelancers, or independent contractors. Only your full-time people are considered staff and follow a set of rules and regulations, different than others who you may have contracted.
Categorize personal and business expenses
It happens often that your personal expenses get muddled with business expenses. This could be in small things like petty cash, but if your personal and business accounts are not separated, it can cause you major headaches in the future. Your business account needs to be totally separate from your personal account. Always avoid co-mingling of funds.
Healthy business finances begin with good bookkeeping. As a business owner, you want to spend less time in keeping financial records clean and clear and spend more time growing your business. No matter the size of your business, you still need a financial system that is easy and generates high-quality reports for you and your clients. With proper bookkeeping in place, companies can effectively manage their cash flow.