Excellent financial management is a critical factor in the success of a business. However, managing a business requires analytical thinking and keen attention to detail, from operations and staff management to marketing. With these responsibilities, it can be challenging to go over, analyze, and manage a business’s financials, such as bookkeeping.
In this article, our financial experts at Ricker Duval LLC will help you understand how effective bookkeeping can help your business, and what you can do to make bookkeeping easier.
The Importance of Bookkeeping in Businesses
Bookkeeping is vital in businesses because it helps owners have accurate records of their past and current performance. In addition, it facilitates budgeting, tax preparation, and decision-making. But while you don’t have to do the bookkeeping yourself because you can opt for professional bookkeeping services, as an owner, you must have a great understanding of bookkeeping to oversee your business’s finances accurately and efficiently.
6 Useful Bookkeeping Tips for Any Business
1. Apply for a Business Bank Account
Using a personal bank account for a business is a major red flag any business owner must avoid. With a business bank account, tracking transactions is easier and less time-consuming. For better organization, you can even apply for a checking and savings account for your company. You should also get a business credit card to earn a separate credit rating. By doing these, you or your bookkeeper can easily monitor your business’s finances.
2. Invest in Automated Accounting Software
Investing in automated, cloud-based accounting software can massively help you manage your business because it will make it possible for you to keep track of your latest financials wherever you are. For instance, most programs can automatically track expenses, create cash flow reports, and send invoices.
You can choose from a range of software systems, but if you don’t know the right software to get for your business, you may consult our experts at Ricker Duval for help.
3. Track Your Business Expenses
Certain business expenses are tax-deductible, which means that if you fail to keep an accurate record, you may not benefit from these claims as much as you should. For example, when you use your personal car for a business trip, you may reimburse for the mileage you have driven. You just need to submit the required information like you would for any business reimbursements. If you’re unsure about your deductible expenses, you should speak with a professional accountant for help.
4. Review Financial Reports Regularly
Allocating time for reviewing financial reports every week is an excellent habit every business owner should adopt. Even though you have an automated software system, checking it at least two times a month can give you peace of mind that everything is as it should be. However, if going over your business’s purchases, expenses, withdrawals, and other financials is almost impossible, it would be best to call for professional bookkeeping services.
5. Create an Audit Trail
An audit trail is a record that contains all your business transactions. For example, if you are dealing with a tax audit, your audit trail can help you retrace your past purchases and other financial data. It may also come in handy in preventing fraudulent acts and finding missing transaction documents.
6. Save for Tax Payments
If you fail to set aside enough money for taxes before the deadline, you will be fined for late payment. To prevent this from happening, you can save a small amount from your business’s income every month and put it in your business savings account. This way, you won’t have to worry much about your tax payments every year.
Having accurate and efficient bookkeeping is one of the critical factors that can make a business succeed. By applying for a business bank account, having automated accounting software, reviewing financial reports, keeping an audit trail, and budgeting money for tax payments, you are making your business bookkeeping much more manageable.
If you need help with bookkeeping and financial management, Ricker Duval LLC is here for you. Simply schedule a free consultation with us, and we’ll address your questions and concerns. Let us help you grow your business with our professional business solutions.