Organized bookkeeping is the bread and butter of all businesses. Don’t get too hungry though, because we’ve barely begun with these scrumptious tips that will help you kick your business off in the right direction.
Efficiency is KEY!
Chart of Accounts
One of the most important things to take note of when managing your business is to keep track of your chart of accounts. This simply means you keep track of your assets, liabilities, equity, revenue, and expenses. Keeping track of these reduces the risk of having to wonder where the money went or where it came from. These are the accounts you see on your ledger rather than in your general transaction journal. This is a more efficient way to keep track of your transactions and helps you stay organized.
Drop your pen and paper, it’s time to AUTOMATE! Spreadsheets are easier to use and they are more efficient. Imagine being able to search specific transactions in an instant, imagine the time you can save! Automation not only allows for ease of access but as well as better organization and troubleshooting. This is also a great way to ensure that we don’t have to lose money from fees associated with late payments made.
- Prepare a year-end financial analysis.
- Understand and prepare contingency plans for your business.
- Evaluate the financial needs of your business.
- Keeps track of payments made by clients
Separate Bank Accounts!
Let’s not make it harder on ourselves to guess how much we have and how much our business has. Keeping separate bank accounts for our personal finances and business finances is a lot less of a hassle than you think.
- Makes business planning easier.
- Forecasting is more effective without having to estimate and round off.
- Tax deductions are not mixed in with your personal purchases which can lead to legal issues for a growing business.
This tip cannot be stressed ENOUGH! It is important to stay updated about the finances of your business. As mentioned earlier, bookkeeping is what can make or break your business. It would be much better to stay involved with the finances that concern your business. If you do not have the time, add it to your schedule to check up on your finances. There is no such thing as being too safe when it comes to money.
In line with staying updated about your finances, it would also be recommended to…
Hire a Professional!
You may be thinking–“why would I want to hire a professional, it’s just adding my revenue and subtracting my expenses”– Well, there is more to it than adding and subtracting revenues and expenses. Hiring professional accountants help:
- Point out overlooked transactions.
- Help create a forecast that predicts your financial standing for the next few months.
- Look over your entire accounting cycle for you.
This saves you from having to study accounting terms and learn new methods while having to manage your business. While it’s great to learn these things on your own, getting professional help is still an efficient way to manage and organize your finances.
- EVERY. CENT. COUNTS. As much as you can, try not to round off the numbers for a more accurate forecast and a better analysis.
- Double-check and check again. I’ve been saying this a lot but, you can never be too sure especially when it comes to money.
- Update your chart of accounts as much as you need. Your business is growing which means money has a lot more to go to in the future and staying updated with your chart of accounts will save you time in the future.