Bookkeeping is the practice of logging, monitoring, and documenting all money transfers to your company during an accounting period. Bookkeeping can be daunting for some people. There are many small business accounting software programs that will make it easy, even if you have never done any bookkeeping.
Statistics show that the cost of hiring a bookkeeper/outsourcing will decrease by 1.5 percent in the next few years. While this may come as a surprise, it begs the question: What do outsourcing bookkeeping companies know that you don’t? It all changes as technology advances, even the way that you manage accounting. Let’s face it. What is the secret to small business bookkeeping? It’s crucial to keep track of your financial statements when you start a business.
Why online bookkeeping is important for small businesses
Without proper bookkeeping, it’s nearly impossible to run a profitable business. It is difficult to manage a business if you don’t know how much money your clients owe or how much you pay for payroll each month. You might consider not paying all of those expenses and then preparing your tax return for the following year. To keep your transactions under control, it is important to hire bookkeeping services
You probably use a spreadsheet program or a manual report to keep track of your finances if you own a business. Accounting software can be a great tool for keeping track of finances, even if you’re just starting out.
Bookkeeping hacks that can solve the problem
Bookkeeping is often a one-man operation. You’ll need to manage everything from customer service to marketing manager, secretary to sales director and accountant. These bookkeeping tricks will keep your finances in order. We’ll be looking at some important small business accounting hacks which will help your business not only run but thrive.
Tips to manage small business bookkeeping
- Create a separate account
Although it is obvious, many businesses make this error when they first start. It is better to have a separate credit card and business account. This will allow you to export your bank transactions and then transfer them into the software.
If you do not have a separate account, you need not worry. You just need to import your personal transactions into another account.
Many accounting software includes direct bank feeds that allow you to categorize transactions as soon as they arrive. It can connect to your bank feed, which reduces the amount of data entry required.
2. Keep Your Bank Balance Up to Date
Your bank balance is the most important factor in bookkeeping. Before you begin bookkeeping, ensure that your bank balance is up-to-date in your software. You should have the exact same bank balance as your bank. Otherwise, you could miss transactions.
Your software can sync bank statements. Many software, including QuickBooks, Xero, and others, offer features such as automatic bank feeds.
3. Keep cash receipts handy
It is hard to monitor expenses because you must dig through everything to find receipts. There is an easier way.
You can keep track of this by taking a photo of your receipt with your smartphone and then uploading it to the software. There are many apps that can work together with your accounting software.
4. Category Your Expenses
It is a great way to save time and money by categorizing your expenses in your accounting program before you need them. You can also see exactly how much each category is spending. This can help you keep track of your expenses.
Accounting software can categorize expenses directly in the settings. It is possible to assign instead of remembering each one manually.
Be sure to only use categories that conform to IRS standards. To filter the relevant categories, you can consult an accounting professional.
5. Reconciliation Is Key
If your bank accounts can be connected to your accounting software, reconciliation is an efficient and fast bookkeeping activity.
Regular reconciliation is necessary to ensure that your balance sheet on your last bank statement accurately reflects your cash reserve on the general ledger.
If you have an accounting program, add it to your bank accounts. This method is as secure as online banking and allows you to track your income and expenses quickly. It will even handle your month-end reconciliation.
Technologies such as marketing tools for startups are customized by companies to promote product services. Most use different types of technology for different purposes, such as analytics, business or even social media marketing.
You should now have an understanding of the basics of bookkeeping and how they work. A bookkeeper or an accounting firm that is experienced in your field can be a good option. The reporting standards vary by industry, as well as by country. Talk to other owners to find out how they hired a bookkeeper, and which bookkeeping methods they use. Online bookkeeping services are also available.