10 bookkeeping tips for small business
At Charltons, we’ve seen everything in terms of bookkeeping. We’ve helped companies get their bookkeeping back on track and keep on the straight and narrow. We understand that every business has to invest their time and resources into the best bookkeeping possible, because failing to do so can have tough consequences.
We have a number of tips that we like to give our clients:
1. Set aside time every week
Bookkeeping isn’t just something that you have to get around to every now and then. It should be a regular activity that your business undertakes every week as a part of your operations. When you keep bookkeeping scheduled into your time and your team’s calendar, there’s no chance that you’ll fall behind. Because trust us – when you fall behind once, there’s a good chance you won’t recover.
2. Use the right software
When you start out, it’s important to choose the right software for your bookkeeping. Getting the apps that are the best possible fit for your team is easy when you’re at the beginning of your bookkeeping but if you have the wrong package it’s a lot harder to switch down the track. That’s not going to be good for you. The right bookkeeping software will let you automate tasks, manage everything from a central dashboard and become a streamlined rock star bookkeeper!
3. Keep your receipts
You will never regret the 30 seconds it takes to file a receipt. It’s not that hard. If you don’t do it, you could find yourself in some serious difficulties later on, and you’ll be kicking yourself then. There are all kinds of ways to make it even easier! For example, you can go mobile and digital with your receipts – snapping and saving pictures so you can tag and search them later.
4. Double check everything
Human mistakes are possible when it comes to bookkeeping. You want to work with accountants and bookkeepers who you know are detail oriented and will complete regular quality checks. Everything has to be correct, and if it’s not you’ll be the one to bear penalties later! In bookkeeping, there’s only room for detail.
5. Track your expenses
Make sure to keep an easy log of your expenses. Most accounting and bookkeeping packages will let you do this almost automatically, but you can always maintain a good ol’ spreadsheet if you’re more comfortable with that. Expense tracking is a part of bookkeeping that you can’t treat as a low priority.
6. Hire the right team
When you have bookkeepers and accountants that you know you can trust and rely on, it’s going to make everything simpler. The trick is to hire a firm, a contractor or a staff member who are going to be extremely proactive and who will be motivated and focused. It’s their job to look after your business’ most basic yet most crucial information in the form of your financial records – so you can’t afford to work with grinders who won’t think outside the box!
7. Have a monthly Work In Progress (WIP) meeting
Every month, you need to review the status of your bookkeeping, record keeping, tracking and collecting. What has been done, what should be done and what has fallen through the cracks. A monthly WIP meeting with your bookkeeping team can help you stay on top of the tasks and keep ahead of the curve! It could only take 15 minutes. It’ll be 15 minutes well spent.
8. Keep key dates in mind
Don’t let anything creep up on you. Highlight the end and the beginning of every financial year, highlight when your tax is due and learn the milestones of your business’ financial life. Doing so will let you manage and maintain your bookkeeping around the right dates and help you stay prepared.
9. Make it a priority
Sometimes, you are going to need to drop what you’re doing and work on your books. It’s not a chore to avoid or something to worry about next month. Don’t put it on your “Gunna Do” list. It’s a hugely important aspect of running your business. Make your bookkeeping a priority so that your staff know how crucial it is to the whole company’s health.
10. Accuracy is key
Bookkeeping is not something you can fudge. You need to make sure that every piece of information recorded is accurate, not a rough estimate or a wild guess. Hard data must be recorded and it must be backed up with evidence in the form of receipts, invoices and paperwork. Anything less is going to set you up for a tough conversation with the ATO!
This is the latest edition of Spotcap Specialists – a content series which features advice and tips from experts in a range of fields to support small business growth.
This post was written by Chris Charlton, Managing Director, of Charltons. Chris is a Chartered Accountant and Certified Tax Advisor and has been Charltons’ visionary and leader for over 35 years. A hands-on approach to clients’ tax affairs to ascertain and negotiate the best tax outcomes was the driving force in establishing a reputation for problem solving and proactive counsel.
Want to hear more from Chris?