Bookkeeping Tips For Small Business Owners

With the rush of tax season now in the rearview mirror, people are trying their best to get back to business as usual. Every year we talk with multiple business owners who struggled through tax season. Some were too busy to handle the company’s complex return and had to file an extension. While others failed to keep accurate records and received a substantially lower return than anticipated. We heard these problems and decided to provide a few tips to help small business better prepare for their financial future.

Perform Regular Reviews

If you’ve ever gone more than a few weeks without reconciling financial accounts you’re probably aware of how quickly that task can become overwhelming. When business owners aren’t regularly monitoring accounts, things can slip through the cracks. These slip-ups can compound over the year, making next tax season unpleasant. Set a schedule to review financial data every few weeks to ensure your company is on the right track.

We also recommend a more in-depth quarterly review of company financial data. Take this time to investigate for trends or outliers in the data. Things like sales growth, revenue or expense increases, and large purchases need to be accounted and adjusted for. These quarterly reviews will help make your life easier when it’s time to do taxes. If you’d like to set up a structure for these financial reviews, but don’t know how to get started, we offer business management services to help create those good habits.

Use Automation When Possible

With the increased use of cloud-based technology, more companies are switching business operations to a digital platform. This can include point-of-sale, banking, financial record keeping, or even employee timesheets. Automating your system keeps you up to date on financial data in real time. This automation also provides an extra layer of security, because data is regularly backed up in the cloud. When employees use digital timesheets, records are automatically updated, giving you a look into hours worked, absences, and paid time off. While these functions of automation can be incredibly useful, it’s important to note what financial software your bookkeeper can work with. If you use unsupported software you might run into integration problems with your bookkeeper and their software. Always double check to make sure what you’re using won’t cause you issues in the future!

Keep Track of Expenses & Liabilities

Tax laws change about as frequently as the weather. Every year the IRS and state governments release new tax guidelines for business owners, changing what can and can’t be deducted, how records should be maintained, and how detailed those records should be. Bookkeepers can assist with understanding these new regulations and help you set up a system to keep track of expenses moving forward.

Business owners should pay attention to all their accounts, but one that should get particular attention is accounts receivable. If you’ve got a large number of clients that owe the business money, your business could be suffering financially. Keep track of accounts receivable, giving appropriate nudges to customers when they fall behind. Even if the customer can’t pay in full, this will still could give you an opportunity to set up payment plans for customers. Partial payment is better than non-payment.

These are just a few tips that can help you keep business operations running smoothly, but there are many more. Here at Executive Resources Financial Services Inc. we specialize in helping small business owners make the most of their business through record keeping, business system management, and tax preparation. If you’ve got a question and would like to speak with our expert bookkeepers, please feel free to fill out our contact form below!

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