Financial records are one of the most important records that every business owner should keep. But unfortunately, in reality, most business owners and small business owners usually neglect this aspect of their business record keeping. They either do this because they are not sure about the right way or have a hard time finding the right time to do it.
Several business owners think they would save money if they did it themselves. They believe it is too expensive to hire a professional. This mentality could result in problems. Legal record requirements state that businesses should maintain timely and accurate records.
An easy way to maintain and keep and keep your financial record is by using good accounting software. When you start a business, you should get your records implemented and organized using accounting software. Below are seven tips that can help you reduce the hassle of financial record keeping while making it more accessible.
Use bookkeeping services to improve records
Good accounting or bookkeeping software should be essential for your business accounting tools. In addition, virtual bookkeeping and other types of online bookkeeping service are on the rise. Therefore, you need to keep up with the latest technology.
When you have a good bookkeeping software or service, you will be able to make detailed financial reports, streamline data entry, automate recordkeeping, and consolidate data. It would also help you improve accuracy across your business while eliminating time spent on repetitive tasks.
Use accounting software
Initially, pen and paper record-keeping was the norm. Then there was a transition to excel spreadsheets. Finally, however, there is new and better accounting software that you can use. Such software would help you automate your record-keeping while quickly speeding up the whole process.
You would be able to tally income and expenses automatically and provide readymade reports without fiddling around with excel formulas. Buying the right accounting software for your business can be beneficial.
If you do not know the best software to use, you can speak with your accountant. He would be able to provide you with professional information. With online software, you would be able to access your accounting information anywhere as there is an internet connection. This would also make it easier for your accountant to access your files.
Getting an online program ensures that your programs are continuously backed up to cloud storage. However, it is recommended that you own a hard copy as well. Having desktop accounting software allows you to regularly back up your files to ensure that you do not lose your data. In addition, you would be able to have the upfront cost of purchasing the program alongside a continuous upgrade to maintain it.
Separate your business expenses from personal expenses
It is pretty easy to buy your items on your business account, but you shouldn’t be tempted to do this. It is a bad habit to get into and can lead to tax issues. You should be able to sort out your personal expenses and separate them from your business expenses. To ensure that you have an excellent record, business and personal expenses should be separate.
Have a schedule weekly
If you want to keep and maintain your business records, ensure that you set aside a time each week to keep your records straight and current. Every week, you should review your expenses and income. Then manage your payable and receivable accounts.
When you establish a set schedule, it will help you in keeping your financial records current while also giving you an overview of how well your business is doing. It would also allow you to control your cash flow.
Create a file plan
When you create a file plan, it would be pretty easy to store your records for the future and to access them down the road. Most people feel filing is boring work. However, it can have a positive effect on your business record-keeping process. Ensure that you use an efficient naming system. This would help you to search through your records when you need them.
Keep your receipts electronic
Gone are the days of only keeping receipts in cupboards. Instead, you should make them digital. Digital receipts are now a norm, as far as there are clear original copies of the receipt. Electronic records hold advantages.
You can easily make summaries, invoices, and income taxes, by searching through digital files. However, when you use a good naming system, it would be more accessible by just using the built-in search function in every computer.
If you take advantage of cloud storage, you would be able to also save yourself in case of thefts or fire by storing your records in safe and secure servers around the globe.
Get professional help
Maybe all of the above reasons seem to baffle you, then all you need to do is to invest in the services of a professional bookkeeper or accountant. This might seem like an unnecessary expense. However, how it can be profitable to you in various ways:
- Avoid penalties. When you leave your records in the hands of a professional, you will rest assured that they are compliant.
- Keeping business records can be time-tasking, and your time as a business owner is precious since your job would revolve around running and winning new contracts or jobs.
- Having a tax advisor or professional accountant ensures that you get to structure your expenses and accounts to let you determine how you could save yourself more money than when doing it yourself.
Most business owners usually find it difficult to find a reliable and trustworthy bookkeeper or accountant to take the stress out for them. However, if you properly research, you would be able to get several exceptional accountants in your area.
That’s A Wrap
You might not be too familiar with financial systems. However, you should be able to use the above methods to start and keep your business records running with little to no effort. So, if you or any one else needs help with sorting their records, simply refer to this post.