Did you know that 64 percent of business owners do their own bookkeeping?
Cloud-based software and workflow automation have taken a lot of the hassle out of accounting tasks, and it’s become a lot easier for small businesses on a budget to take care of their own finances. What other steps can they take to get things under control, though? Luckily, we’re here to help.
Read on to learn four of the best tips for getting started.
1. Stay On Top of Taxes
It’s important to remember why you’re keeping track of everything in the first place. When you’re diligent with your finances, you make it a lot harder for the IRS to find legitimate reasons to audit your business. The more accurate you are with making payments and tracking your income, the better off you’re going to be once tax season rolls around.
You should also remember to keep track of your work expenses and receipts. It’s best to keep both bank records and receipts on hand whenever you make business-related purchases.
2. Update Your Financial Data
If you’re learning about accounting for Shopify, you want all of your data to be up to date. The same goes for whether you’re filing taxes or switching checking accounts, though. If you have software this will usually be done for you, and all you’ll have to do is log in to check things out.
It’s best to take this step at least once a day.
3. Categorize Expenses
Most accounting software programs come equipped with tools you can use to report expenses and upload receipts, making it a lot easier to store information immediately. Rather than having a stack of receipts at the end of the month (or even year), simply take a photo of your receipts as they accumulate and upload them.
They’ll also create unique categories for each expense recorded, so you don’t have to worry about making sure each expense is in its proper place.
4. Create a Routine
Finally, it’s smart to consider creating a routine. Knowing the tasks you have to complete on a daily, weekly, monthly, and quarterly basis can go a long way in improving the effectiveness and accuracy of your company’s financial records.
Your routines should include things like updating your financial data, reconciling both cash and receipts, and reviewing your transactions.
The frequency at which you complete these tasks is completely up to you, but it’s important to establish a system that works for you and then stick to it.
Don’t Neglect Your Accounting Tasks
Once you have a solid process to take care of all your accounting tasks, the process becomes a lot smoother for your business. Whether you’re just getting started or you’re trying to take charge of your finances, having everything settled before tax season is going to help you avoid headaches later down the line.
For more accounting tips and tricks, check out the rest of our website.