Business, big and small alike, would want to cut down on time and money spent for any business activity with small businesses wanting even more so. Time and money are two very important pieces of the business puzzle. Bookkeeping can be intimidating for small business owners and it is this fear that causes them to make decisions irrationally. Others get bored by it which also, unsurprisingly, gets the same effect albeit less evident.
You don’t have to be intimidated or bored by accounting. Successful business owners don’t view bookkeeping negatively; instead they go through the whole process systematically and thoroughly. They have adopted a few basic procedures to stay on top of the paperwork. By doing so, they save time, money and a lot of stress.
Small business owners need to take control of their spending be it time or money or both. There are several approaches and some of these are essential to actually doing business efficiently. This article poses 6 ways to help you, small business owners, to save on time and money with your respective accounting and bookkeeping services.
- Go paperless.
Storing tax documents for at least six years can be a hassle. Another option is to purchase a small fireproof safe to store important personal documents (passport, life insurance, etc.) along with a regular backup of your bookkeeping software and tax returns saved on a flash drive. For extra data protection, consider off-site physical storage or online data storage for these records and scanned files.
- Avoid cash.
Instead, use your debit or credit card religiously. When you use cash you lose track of potential write-offs. If you have to pull money out of an ATM, note on the receipt the purpose of the withdrawal.
- Separate personal accounts from business accounts.
Don’t mix the two. Keeping personal and business bank accounts and credit cards separate will make bookkeeping much easier and help maintain your corporate veil if you have a formal entity.
- Mixing Business and Personal Finances.
Business and personal finance must be separate. This helps provide a more accurate record of transactions made for business and ones made for personal use. It is better to have separate accounts in order to truly see the business as a separate entity from the owner.
- Trashing Receipts.
Receipts are necessary for serving as proof to validate transactions on a company’s books. Authorities may deem certain entries as invalid if there is lack of proof. Receipts also help clear up any mistake made during the bookkeeping process.
- Making Math Mistakes.
Bookkeeping works like dominos stacked in a line, the slightest error may cause the whole thing to end up in a larger web of errors. One of the common mistakes that businessmen encounter is math mistakes. Even when using accounting software, these errors may crop up occasionally which is why it’s important to regularly check the books for accuracy.