Are you a busy entrepreneur who loves spending more time growing your business and less time on mundane activities like bookkeeping? If so, this guide is for you! Bookkeeping doesn’t have to be overwhelming or take up too much of your precious time.
Here we’ll discuss optimizing your workflow while ensuring accuracy in the numbers, a balancing act that all busy entrepreneurs should understand and strive towards.
This guide is specially written for non-accountant entrepreneurs who are super busy. It provides simple, easy-to-follow instructions on managing your books, from setting up an effective record-keeping system to completing accurate financial reports.
So if you want hassle-free bookkeeping processes and insights into improving them, read on!
Decide Which Bookkeeping Method You Will Use
When it comes to keeping track of your finances, there are two distinct methods you can choose from: single-entry and double-entry.
Single-entry involves recording transactions as they occur in one single ledger, while double-entry requires recording debits and credits across at least two ledgers.
When deciding between the two record-keeping techniques, consider the level of complexity that needs insight into your financial transactions.
Double-entry records more information regarding your economic activity, making it ideal for businesses with significant financial activity. Meanwhile, single-entry is a more straightforward method of recordkeeping, typically best for individuals tracking their finances.
No matter how you go about it, choosing a consistent method for recording financial data is essential for understanding and reporting your economic performance over time.
Stay On Top of Taxes by Creating Separate Business Accounts
Keeping separate accounts is a good habit and makes filing taxes much more straightforward. In addition, by having organized documentation of all financial information readily available, tax authorities such as the Internal Revenue Service (IRS) can quickly review the records if needed.
This significantly reduces the time between gathering information and ensuring everything on your tax forms is correct.
The most common business account includes a checking account for day-to-day banking transactions, a savings account for storing funds in a low-risk way and accruing interest over time, and a merchant account for accepting customer payments.
Each type of account has its own set of requirements and also offers different levels of security to protect your organization’s finances.
In addition, separate accounts offer peace of mind knowing you won’t have to scramble for last-minute documents when it’s finally time to file a return.
Besides separate accounts, it is also important to become familiarized with any additional local regulations related to financial matters, depending on where you operate from, such as capital requirements, etc. So inform yourself accordingly before taking action lest fines or penalties arise due to non-compliance.
Keep Your Financial Reports Secure
Keeping records secure and protected is also essential to maintaining accuracy in bookkeeping. Consider taking the necessary steps to organize data into easily accessible systems so bookkeepers can access documents quickly and efficiently.
With the rise of cloud-based solutions, automating these processes can be done much faster and easier than ever.
Cloud-based accounting software is a powerful tool that enables users to securely store their financial information in the cloud and access it from anywhere at any time. So no matter your location, you’ll always have access to up-to-date information essential to accurate bookkeeping.
Furthermore, since all data is saved in the cloud environment, users don’t need to worry about backing up or losing information.
Ultimately, cloud-based accounting software is invaluable for those looking to save time and money when creating and updating their budgets.
Create a Budget
Creating a budget is the first step to staying on top of your finances. A budget lets you track your income and expenses to know exactly where your money goes each month.
It also helps you create goals that will help ensure that your business remains profitable.
When creating a budget, be sure to include the following:
- All of your fixed monthly costs (rent/mortgage payments, utilities)
- Variable costs (travel expenses)
- Any other miscellaneous costs (office supplies)
Many bookkeeping services offer budget planning as part of their portfolio of services for those who want to gain visibility into their financial future. This can include the creation of annual or quarterly budgets and monthly tracking reports, giving business owners insight into where costs can be cut and how to allot funds for future investments.
Additionally, budget planning often bolsters strategic business decisions by allowing businesses to forecast profits and expenses accurately.
Finally, implementing a reliable budget can help companies’ everyday operations run more smoothly, taking the guesswork out of financial planning.
Set Up Accounting Software
One of the best ways for busy entrepreneurs to streamline their bookkeeping processes is by automating them. You can save time and effort in the long run by automating specific tasks, such as invoicing, accounts receivable and payable, tax payments, and payroll.
There are many tools available that allow you to automate these processes quickly and efficiently.
A great way for busy entrepreneurs to stay on top of their finances is by setting up accounting software such as QuickBooks or Xero.
These programs make it easy for entrepreneurs to track their income and expenses, create invoices for customers or clients, manage payroll taxes, and more! They also provide easy-to-understand reports so you can quickly see how your business is financially at any given time.
Outsource Your Accounting Needs
Outsourcing bookkeeping can be a massive benefit for the busy entrepreneur.
With the right bookkeeping services, you have access to financial advice, bookkeeping recommendations, and support tailored to the specific needs of your business. You can also ensure that time-sensitive reports like taxes are accurate and up-to-date.
Most importantly, savvy businesses will feel secure knowing that their accountants clearly understand their current financial position and gains insight into future business decisions.
Recent research on bookkeeping services shows that 67% of SMB owners are satisfied with the services they’ve received. So opting to outsource is proving a wise decision!
Many accounting firms are pros in helping small businesses with their accounting needs. Hiring an experienced accountant can help ensure that your books are kept up-to-date and accurate at all times, freeing up more of your precious time for other essential tasks.
Conclusion
Staying on top of your company’s finances doesn’t have to be daunting. With some planning and utilizing tools like those mentioned above, it can be surprisingly simple!
In addition to ensuring accuracy in record keeping can provide valuable insights into where costs may be increasing unexpectedly or where there may be potential savings opportunities down the line.
Keeping your bookkeeping organized from the start will save you a lot of headaches down the road. You can do this with simple tips or use them to test your future bookkeeping expert. Regardless of your route, don’t procrastinate on your bookkeeping.
It’ll only make things harder in the long run!
