When it comes to good business, quality bookkeeping is essential to making a profit and having success and longevity as a small business owner. We’ve compiled a list of 5 tips to help you and your business start off the new year on the right foot.
Track Your Business Invoices
When clients and customers are late paying invoices or fail to pay an invoice by a set deadline, your cash flow is sure to take a hit and your business could have difficulty staying afloat. One way to combat this is by making sure that clients don’t order products and materials until their previous order has been paid. Another option is to set a deadline to anybody that you extend a vendor credit. This will rack up penalty charges on the amount that isn’t paid by the deadline. Remember that bad debt is never good for your business!
Separate Receivable Payments from Borrowed Loans
Mixing funds deposited by clients with funds that you borrow can lead to a lot of confusion and mix-ups. This can lead to a financial crisis down the road. Your bookkeeping software should have the ability to keep records of income and borrowed funds separate. Therefore, when it’s time to follow-up on your funds, you will be able to keep track of where money is coming from and where it is going. Correctly managing funds can save a business on the brink of collapse!
Set Aside Time to Review Your Books
Your books should be reviewed often. Many successful entrepreneurs suggest that checking books weekly is the way to go to stay updated about the state of your business. This will help you gain a broader understanding of your cash flow, weekly expenses, and your current invoices. This will allow you to find and analyze issues that arise in your business and combat them quickly. Having a business credit card can also help track income and expenses generated by your business because it keeps a record of expenses so you don’t need to save and file receipts and confirmation.
Save and Back-Up Financial Records
When it comes to bookkeeping, organization is key. Having all documents and transactions well-kept can be a valuable skill to you as a business owner. Some documents to save include bank statements, credit card statements, profit and loss statements, balance sheets, receipts, and invoices for sales and services rendered by the business. This practice can both set and expand a solid financial foundation for your business.
Use a Simple Accounting Software
Strong and easy-to-use accounting software allows you to check your financial status anytime! Accounting software supports you by giving you the ability to multi-task when working out income and expenses for your business. It is strongly recommended that you chat with a trained accountant about the difficulty, reliability, and complications associated with different software.
Think you need a bit more bookkeeping advice? At JDM Business Services LLC, we work hard to find creative solutions to your bookkeeping woes while saving you time and money. Call 860-375-3505 or by email [email protected] to learn more about how we can serve you and your business, or to talk to us about accounting software!
