Here are three easy small business bookkeeping tips that will save your sanity and keep your finances organized for quick and accurate bookkeeping.
Separate business from personal expenses.
So easy to do and such a time saver
Even if your business is not incorporated, open a separate checking account just for business transaction. Run all business deposits and withdrawals through that one checking account.
You can make deposits from your personal account to the business checking account, but business expenses must be captured in one place only.
Keep a separate credit card account just for the business. Business credit card transactions should also be segregated from personal credit card transactions.
If ever you are audited by the IRS, it will be a much less stressful experience if your business and personal transactions are not intermingled.
Technology can be a key factor
Sign up for online banking.
You wouldn’t believe how few small business owners have done this. It will save so much time and hassle. Once the online account is set up, it can provide an automatic journal of transactions that downloads into your account. This is making it easier for your bookkeeper to do month-end reconciliation. American Express has one of the best download programs out there.
Save all your bank statements with cancelled checks.
If you opt for online statements, the images of cancelled checks should be included. Ask your bank.
The IRS considers cancelled checks as the only proof a bill has been paid. You need to have these images of cancelled checks and to save these statements for seven years. Save these electronic statements to a backup drive just in case technology fails at the wrong moment.
If the data you enter into your accounting system is not accurate, your financial statements will be no help to you. Your financial statements hold the key to the future of your business.
o Open up a separate business account. Open up a separate business credit card. Sign up for online banking. Keep your monthly bank statements with cancelled checks accessible.
Fawn Choate, the owner of The Office On The Go, has been working with small business owners for over 15 years. She is a Quickbooks Pro Advisor and has a keen understand of the inner workings of a small business entrepreneur as she is one herself. Her firm has a wide range of services that help companies outsource their bookkeeping and accounting to save time and money. Companies throughout Essex County MA, hire The Office On The Go, for a wide range of services. Some companies contract for a few hours a month and others 1 or two days a week, whatever is needed to make their operation run smoothly. Fawn can be reached at firstname.lastname@example.org.