4 Helpful Bookkeeping Tips for Small Business Owners

As a business owner, you know how stressful running a business can be. Not only is there a lot of pressure to succeed, you have a lot of responsibilities and an abundance of information to keep track of. If you’re a small business owner who wants to keep your finances more organized and make tax time less of a hassle, these four bookkeeping tips can make all the difference. 

Having a reliable system in place is the first key to successful bookkeeping. If your business only has a small amount of yearly transactions, you can keep track of financial records in Excel or another similar spreadsheet. On the other hand, if your business has a lot of transactions in a year, you may choose to automate the bookkeeping process using a bookkeeping software such as QuickBooks Online. A good bookkeeping system will account for balance sheets, accounts receivable, income statements, and accounts payable. The more organized your system is the better because if you have all your financial records in one place and in a way that is easy to find, you’ll save yourself a lot of time come tax season. 

Tracking the revenue and expenses of your business is extremely important. Having an accurate record of where your money goes and where your money comes from can give you and your financial advisors crucial insights into how your business is performing. By 

reviewing these records, you can gain a better understanding of where your strengths and help you identify opportunities for improvement. 

One way to optimize your bookkeeping efforts is to reconcile your bank accounts every month. Monthly reconciling of accounts helps ensure the accuracy of financial statements, allows for more precise tax reporting, and allows you to verify cash flow. In addition, account reconciliation helps to identify errors and unusual transactions, which can help catch fraudulent activity.

While many small business owners perform their bookkeeping tasks, it’s also important to recognize when you need help. The busier and more successful your small business becomes, the harder it is to keep track of transactions. Hiring a professional bookkeeper can save you time, improve the level of organization of your financial records, and ensure your business complies with tax reporting obligations. 

When it comes to bookkeeping, the key is to find a process that works for you. You want a system that you can stay on top of and is easy for you to use. For some, these may mean outsourcing tasks to a professional bookkeeper.