For most entrepreneurs, the mere thought of taking part in managing their company’s books of accounts churns their stomachs. And if you dread it too, don’t panic, you’re not alone.
Bookkeeping is perhaps one of those areas some business owners like to keep off and wait for the “simplified” reports to be presented to them. To some, bookkeeping brings an avalanche of nerves (I know of someone who has regular nightmares about the IRS) while others consider it as a time-consuming exercise meant for a certain group of people.
Well, whatever the feeling you have towards bookkeeping may be, as a business owner, it’s your job to make sure your company’s finances are well-managed.
To be successful, you may have to tweak your mind and starting seeing bookkeeping as an important business process that plays a big role in the survival of your company.
And for those who need an easier way of getting along with this business process, I will share with you some of the simple time-tested tips for keeping proper books of accounts.
Here are 5 practical bookkeeping tips for every entrepreneur today:
Tip#1. Get a Good Accounting Application
Investing in a suitable accounting application from the start is critical. This will help you to organize your accounting procedures, generate, track, manage, as well as evaluate your accounting records effectively.
There are so many bookkeeping applications in the market today – be sure to do a thorough research or consult about it from bookkeepers who specialize in your area of business. The more customized a solution, the better the service to its users.
However, one feature that should be on top of your search list is that the application should be an online one. This will grant you real-time access to your company revenues, expenses, payables, and receivables letting you execute your accounting functions much faster and efficiently.
Tip#2. Store all your Invoices/Receipts
Keeping a record of all the documents relating to your sales safely could help you track your company Cashflow activities. Sometimes it can be quite difficult to maintain a record of cash expenses; it might be prudent to have a handy notepad with you to record cash transactions. This is a great way of keeping track of your company’s profitability.
Tip#3. Keep Track of the Receivables
Receivables are a vital part of every business. As much as you may issue invoices for each and every sale, it is important to ensure all invoices have been recorded and paid for on time.
Failure to do so may lead to Cashflow problems which might send a business to its knees in what may seem like an instant.
Be sure to keep an eye on all your invoices as well as their due dates. This will ensure that all payments are made on time and in the correct amounts.
Tip#4. Diarize Major Expenses
Imagine rushing for a loan or making impromptu cuts because certain major expenses become unavoidable. Businesses experience ups and downs, it is essential to plan for major expenses such as rent during hard times.
Tip#5. Stay Organized
Proper bookkeeping requires accurate records – create a specific way of staying organized throughout the year. Ensure you have well-marked documents about the business stored in specific areas known to people who may need access to such documents. Also, take some time to think about your work ethics and your company’s workflow and try to streamline the two.
There you have it!
Even if you choose to involve a professional once or twice in a year or engage one all year round to review your accounting records, having a team of qualified bookkeepers is essential towards ensuring that existing and potential threats are fished out and taken care of at early stages to prevent any losses.
A good bookkeeper will seek to be your partner in business and not just a customer who pays their bills – thankfully, at Profit Matters, we do exactly that!
For any inquiries regarding your bookkeeping function, please reach out to us.
Until then, let’s keep accounting!