Bookkeeping can feel overwhelming for anybody, but it doesn’t have to be. Here are some tips to start you off on the right foot.
Separate business and personal expenses.
Your business transactions should never go through a personal bank account. Think about the time you will spend going through every transaction on your personal bank and credit card statements to make sure you take every deduction and claim every line of income. Especially when you aren’t reconciling regularly and you wait until the end of the year. Not only are you spending valuable time on separating your finances, but the co-mingling of assets also makes it harder to protect you in the event someone tries to sue you. It’s called “piercing the veil”- I can’t offer you legal advice, but opening a business bank account for all your business income and expenses will definitely save you time and headache.
Actually do it.
No one starts a business to be a bookkeeper. Unless you’re a bookkeeper. Unfortunately, it’s something you HAVE to do. You will have more control of your business if you know how much you are earning and spending. You can keep your records organized using a spreadsheet, but this always leave room for human error. Using a software like QuickBooks makes it easier to track your income, expenses, mileage, and receipts so you aren’t spending hours manually inputting those details. When your finances are organized, you have more peace of mind. Another bonus, tax time becomes exponentially better because you aren’t scrambling at the last minute.
Reconcile. Reconcile. Reconcile.
What does that even mean? Putting it simply, matching your bank transactions to your income and expenses. When you don’t reconcile, chances are you will miss out on valuable expenses that could save you thousands when it’s time to file your taxes. Make sure your financial statements match your bank account, so you are working with the most accurate data.
Hire the right accountant.
When you realize numbers aren’t your cup of tea. Hire the right accountant. Especially when your business is growing fast and you have to divide your time – your financials will always fall behind first. An accountant can help you organize your finances, maximize your profits and file your tax returns.
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