Bookkeeping is a business chore that must be done at least yearly for taxes. It is almost equivalent to laundry. It is best to set time aside every week to do a small load, instead of having to stay home for a full weekend every month to catch up. Think of bookkeeping in the same manner, it a chore that is best done a little each week.
Here are a few tips to help you stay on top of your business’ finances:
Track Every Expense
Categorize, label and track every expense and cash flow, so it is easier to find tax write-offs when the time comes. Create a separate business bank account just for your company and use a business credit card for all your purchases. This will help eliminate the need to keep every small receipt because your bank and credit card statement tracks your expenses.
Accurately Track Deposits and Labor Cost
Ensure you don’t pay unnecessary income taxes by keeping track of your sales revenue, cash infusions and loans. Another thing you don’t want to overpay or underpay is yourself and your employees. Retain everyone’s peace of mind by keeping track of any overtime, benefits or perks you offer.
Sustain Inventory Records
Keep a detailed inventory including dates purchased, purchase prices, stock numbers and sale prices. This will help you notice any misplaced merchandise and maintaining an accurate inventory.
Sending an invoice doesn’t mean you will get paid. Have a plan in place if a customer doesn’t pay within 30 days, 60 days and 90 days. Set up a process of sending a second invoice, making a call or adding fees if a customer misses a deadline. Late payments do hurt your business because they are basically an interest-free loan that affects your cash flow.
If you want to make sure you meet all your tax and compliance obligations this financial year, you can hire an accountant/bookkeeper. Fun fact, a bookkeeper can be a tax deductible.