Tips for keeping your bookkeeping organized

Business owners often use the same bank accounts or credit card for both their personal and business expenses. The use of single accounts commingle your finance and further creating tax and liability issues. There should be a separate bank account for your business transaction with online facilities. It avoids wastage of time in the bookkeeping of your expenses along with the business transactions and helps in:

Better forecasting, budgeting and planning of the business.

Suitable positioning in terms of applying for business loans, investor funds and qualifying for supplier credit.

A clear picture of the income and expenses of the business.

Tax-deductible for a shared expense like travelling and cell phone bills etc.

Bookkeeping must be consistent and timely for efficient payroll management. It is advisable to approach an organized structure of bookkeeping from the beginning. It helps in:

I. Preparation of the year-end statement such as Income tax, Balance sheet etc.

II. A better understanding of the financial position of the business.

III. Better financial analysis.

Charts of accounts must be prepared in respect of the growth planning. Proper categorization and heading of your accounts will speed up the bookkeeping process. It also ensures that your financial reports comprehensible. Begin with an usual account and then modify and expand according to your business.

Your company must have a robust bookkeeping process to gather, generate and archive source documents such as invoice, receipts, timesheets, tax records and other related documents. You must document expenses and income when it occurs and should be reconciled from time to time.

For small business bookkeeping, various accounting apps, software and automation help to organize your data. You can even hire a virtual accountant like Meru accounting providing professional bookkeeping service at $ US 15 per hour.

You can even do away with manual bookkeeping by using online accounting. It gives your business access to a host of integrated and time-saving apps such as PLooto, Receipt bank and T sheets and reducing transcription errors. Online bookkeeping not simplifies the task but also reduces the manual data entry.

Automation of electronic payments and reminders:

Better control over cash can make a difference when you are looking for the growth of the business. Consider it if you haven’t

Sign up for text and email alerts to have remainders for credit card and utility due payments.

Automated payments for recurring payments.

Streamline the payments of receivables by accepting e-transfers, pay-pal etc.

Opting for digital assistance not only ensures positive cash flow but also helps to avoid the charges of late payments.

Business owners review a year’s accounts book in a few days, which makes it tiresome and cumbersome to catch up. There may be a possibility that the financial documents are not up to the mark and represented in an outdated manner. The business also gets affected if these documents are required on an urgent basis. So, if you review your books often from time to time, you will never face such problems. Reviewing financial documents from time to time also helps to find lapses in the process and find a solution to rectify it.

Easily accessible business information is a function of the accounting process. Digitizing your accounting process with cloud-based accounting softwares such as XERO, QBs, and MYOB etc. improved data accessibility, paperless storage and management.