8 Best Bookkeeping Hacks Every Small US Business Owner Should Know
Bookkeeping is the process of monitoring, overseeing, and documenting all money transfers for your company as part of the accounting period. If the idea of bookkeeping makes you nervous, be sure that there have been a number of small business accounting software programs available today that make the whole thing simple, even if you’ve never dealt with or simply done bookkeeping before.
According to statistics, hiring a bookkeeper or outsourcing is expected to decrease by 1.5 percent over the next few years, although this can come as a shock, it raises the question of what outsourced bookkeeping firms know that you don’t. Let’s be honest- it all shifts to the use of technology evolves, including the way you handle accounting. But if we talk about small business bookkeeping, what is the secret? When you’re starting out as a company, it’s important to keep track of your financial statements.
Why is bookkeeping important for small businesses?
It’s almost unlikely to run a successful company without proper bookkeeping, let alone a small business. Consider how difficult it will be to run a company without understanding the amount of money you spend on payroll per month or how much cash your clients owe you. Consider not fully paying for those costs and then preparing the tax return the next year. Therefore, hiring bookkeeping services for small businesses is crucial to keep your transactions in check.
If you’re owning a business, you probably keep track of your finances using a manual report or spreadsheet program. Even if you are starting out, you may profit from using accounting software to keep track of their finances.
How bookkeeping hacks can help resolve the issue
Bookkeeping is usually a one-man army activity. You will have to do everything, from marketing manager to customer service, secretary, sales director, and even accountant. Using these bookkeeping hacks will help keep your financials in order. We will have a look at some of the significant small business accounting hacks that will not only help keep your small business running but also make it thrive.
Hacks to manage small business bookkeeping
- Keep a separate account
It is no brainer but a lot of businesses make this mistake when they start. So, it is better if you have a separate business account and credit card as it will help export your bank transactions and transfer them into the software.
But in case you don’t, there is nothing to worry about. All you need to do is import your personal transactions into a separate account.
Most accounting software has direct bank feeds to help you categorize your transactions soon as they come in. It can also help connect your bank feed, reducing the burden of data entry to do.
- Keep Bank Balance Updated
In bookkeeping, your bank balance is the main factor. So, make sure you keep your bank balance updated in your software before you start with bookkeeping. It should reflect the same amount as your bank, otherwise, it can lead to missing transactions.
You can sync your bank statements with your software. A lot of software like QuickBooks, Xero, and more provide features like automatic bank feed.
- Keep Cash Receipts Handy
Monitoring expenses is difficult as you have always had to dig your way through stuff to find the receipts. But there is a better way.
One way to keep check of that is by taking a picture of the receipt with your phone and uploading it to the software. There are unlimited apps that work in sync with respect to the accounting software you use.
- Categorize Your Expenses
Categorizing your expenses in your accounting software beforehand saves up a lot of time (and money). Another advantage is that you can see the exact amount of expenditure happening in each category. It can help keep your expenses on track.
Most accounting software allows you to categorize expenses in the settings themselves. You can simply assign rather than remembering each of them manually.
Make sure to use specific categories that fit the IRS norms. You can consult with a qualified accounting service provider to ensure you filter relevant categories.
- Reconciliation is Key
Reconciliation is a fast and effective bookkeeping activity if your bank accounts are connected to your accounting software.
Reconciliation must be done routinely to ensure that the balance sheet on your final bank statement reflects the cash reserve on your general ledger.
Try adding your accounting software to your bank accounts if you use it. The method is just as safe as online banking, and it helps you to keep track of your income and expenditure quickly. It even takes care of the month-end reconciliation for you.
- Hire Bookkeeping Consulting Services
Businesses are saving millions and millions by outsourcing their small business bookkeeping to an accounting firm. They are not only experts in their profession, but they are also able to provide you with a comprehensive consultation on what your current bookkeeping might be missing.
If you’re searching for bookkeeping services, reach out to Whiz Consulting to see what services they have to offer.
- Plan Your Taxes Ahead of Time
Don’t forget to file your taxes in time. This is the point where small business accounting can sometimes lose its track. You cannot overlook your tax liabilities, which include filing tax returns and paying related bills. However, you must have all of the other tax records in order to create them. Additionally, rather than paying your taxes in one lump sum during tax season, plan your taxes for the following tax year and pay them in installments. You have the option of paying it with your business savings account or using other methods.
- Make Use of Automatic Invoicing
Whether you conduct business within your nation or across multiple locations, each client will have specific invoicing conditions. Which includes provisions for invoicing sales tax, GST, or VAT, as well as local tax laws. It is important to consider all of these factors because if you are not up to date with all of them, you risk being penalized for failing to follow procedures. The best option is to use bookkeeping software that takes care of these invoicing criteria for you automatically. After all, it’s impractical to manually verify every invoice that is sent out.
Over to you
By now, you must have gotten an idea of bookkeeping hacks and how they work. You can also look for a bookkeeper or accounting firm with expertise in your field. Reporting standards differ by sector, just as they do by country. If you’re unsure, speak to other business owners and see how they recruited a bookkeeper and what bookkeeping techniques they choose to use. You can also look for bookkeeping services online. Whiz Consulting is an online bookkeeping service provider that offers its service irrespective of the region where you are located. Reach out to us through our website to find more information.