As a small business owner, you know accurate bookkeeping is vital to the success of your business. You are also intimately aware of how tedious and time-consuming these tasks are, not to mention the redundancy of bookkeeping tasks. The good news is, there are ways to make bookkeeping a quicker and more friendly process. Here are 3 efficient bookkeeping tips to help you save time and better understand your business’s finances.
Tip #1: Track your revenue and expenses regularly.
When running a business it’s equally important to pay attention to all transactions in and out of your accounts as well as understand your overall financial trends.
- Tracking revenue streams will provide trends and enable you to identify areas of strength or growth. Taking a high-level look at these trends from time to time is a good idea.
- Capture, reconcile, and categorize your expenses regularly, weekly if not daily. This will ensure you are always in front of your costs and can accurately measure it against the revenue.
- Separate business and personal expenses – this helps avoid blurring lines that trigger audits, limit liability if you find yourself in litigation, and simplify tracking business expenses for bookkeeping purposes.
Pro Tip: Open a separate bank account and corporate credit card to be used exclusively for business expenses.
- Find a system, whether it’s done manually or using technology, and stick with it.
Tip #2: Keep your receipts!
Keeping receipts may be an obvious concept, but as a busy small business owner, it can be easy to overlook and even easier to forget.
- Keep all receipts in a safe place and remember to record details for each expense, (why, where, and with whom if applicable).
- Develop a filing system that keeps your receipts sorted and can easily match them to transactions.
Pro Tip: Snap a photo of your receipts and upload them to a dedicated folder on your computer for safekeeping.
- Record your receipts by type to simplify expense categorization at the end of the month.
Pro Tip: Consider using a spreadsheet program like Excel or Google Sheets to track the pertinent details from each receipt. By keeping a digital inventory, you can split a single receipt across more than one expense category and easily sort and total a specific expense category without pouring through a pile of paper.
Tip #3: Schedule time for reviewing your financial reports.
As a small business owner, you are typically working long hours and often managing all departments of your business: operations, sales, marketing, HR, accounting, and customer service. This is a recipe for maintaining the basic bookkeeping, but losing sight of the big financial picture, which is what enables you to strategize and grow the business. Make a schedule and create a recurring appointment or reminder in your calendar to review financials at least once a week.
Here is how this helps:
- Always having a snapshot of overall financial health.
- Have the necessary information to make sound and informed business decisions quickly.
- See your customer base and trends, including products and services.
- Get visibility into whether your revenue is up or down, what needs to be addressed, and know your sales trends.
- Understand your labor costs.
- Know when there are variances in costs and where these changes are.
- To budget and forecast.
Pro Tip: Invest in accounting automation software.
How many hats can one person wear? Small business owners need a single solution to make ALL of these processes easier and faster while increasing productivity, efficiency, and data accuracy. This is where accounting automation technology comes in. Take your accounting practices to the next level and reduce the time-consuming burden of manual work.
Docyt’s AI-powered accounting software is trusted by hundreds of small business owners to simplify their business workflows by automating both expense management and other bookkeeping tasks while gaining access to real-time financial reporting.
To learn more about how Docyt can help your business schedule a free consultation today!