The Importance of Bookkeeping
Bookkeeping is one of the most important aspects of running a business. It provides critical information that can be used to make sound decisions about where to allocate resources and how to grow the business. Taking advantage of a few tried and true bookkeeping hacks simplifies even the most complex and time-consuming tasks, especially for small businesses.
Here are six bookkeeping hacks that’ll save you more time and money.
Hack #1: Automate your bookkeeping process.
Applying automation is one of the best ways to save time and money when it comes to your bookkeeping. This is where using automated accounting software helps because it connects to your bank and credit card accounts, and gives you the ability to upload your paper receipts in the same place so that all your transactions are recorded, analyzed, and even automatically categorized by the system altogether. You don’t have to spend hours manually keying in your expenses into an Excel spreadsheet and then reconciling it against your bank statements.
Hack #2: Keep your personal and business expenses separate.
Intermingling business and personal accounts can be a nightmare at the end of the month or when filing tax returns. By creating clear boundaries, you will avoid unnecessary time pouring through bank and credit card statements to determine which transactions are which. Maintaining separate accounts helps you avoid needless cash flow mishaps and lets you track business transactions, keep accurate books, and get insight into your financial health quickly and easily.
Hack #3: Make data-sharing easily available across your team.
Cloud-based accounting software allows you to access your accounts from anywhere at any time from your mobile device. This type of software can be a lifesaver for entrepreneurs who do a lot of bookkeeping from the road or from home. The software can integrate with other programs, allowing you to easily export data and keep a running ledger of your accounts.
Hack #4: Manage your time and your space.
Take note of the time you spend throughout each day and make a deliberate schedule. You will stay on top of your bookkeeping if you block off time on your calendar for each assigned task, whether it is ensuring vendors are paid, expenses are categorized correctly, or bank statements are reconciled. Also, consider organizing your office and desk area to save time while in search of important slips of paper.
Hack #5: Organize and digitize receipts right away. Make paper receipts a thing of the past.
Don’t wait until the end of the month to manage and take an inventory of your receipts. Either pay digitally to automatically record the transaction or use your mobile device or desktop scanner to easily upload the paper receipt to your accounting software. Recording and categorizing receipts on a timely basis minimize the chances of misplacing your receipts. Incorporating this hack into your process ensures the business has access to necessary operating expense deductions at tax time.
Hack #6: Use automated bill pay services.
In addition to automating your bookkeeping process, consider taking advantage of automated bill pay services. Let’s say you have hundreds of vendors that need to be paid every month, each vendor has set parameters on when and how to get paid. If you’re paying your vendors manually, this can be a pain to track and process. With accounting software, you can easily set up automated bill pay by connecting your vendor accounts and bank and credit card accounts to initiate recurring or one-time payments so you don’t miss a payment!
We want to leave you with a bonus hack! If you’re not doing this already, try using AI-based accounting technology. Most of the hacks listed here can be automated by accounting software, which gives small businesses a competitive edge. A solution like Docyt can help by automating your bookkeeping tasks with continuous bank reconciliation, automated expense categorization, and simplified corporate credit card and expense management. Get time back by streamlining your bookkeeping so you can spend your time growing your business. Get your free consultation!