Bookkeeping Business Doesn’t Have To Be Hard. Read These Tips

#1. Setting Up a Business Checking Account

Accounting can be complicated, but it doesn’t have to be. Your business checking account is a good place to start when you’re trying to simplify your money management, and it’s one of the first things you should set up if you haven’t done so already. A business checking account has lots of advantages.

You get a wider choice of financial products from different banks, and often at better rates than other types of accounts. It will also help keep your personal and business finances separate if that’s what you want, which will make tracking your expenses easier.

Finally, having a business checking account makes it easy for people to pay you via check or online transfer because they’ll know where to send the payment. Link

#2. Make Your Own Bank Reconciliation Statement

It’s not uncommon for small business owners to get confused about their finances, which is why it makes sense to create your bank reconciliation statement every month. This is where you compare the chequebook balance to the bank’s records of all your recent deposits and payments, line by line.

By reconciling your books every month, you’ll avoid any problems with bounced checks or other issues that can cost you money. If necessary, you might have to ask the bank for some of the missing transactions from previous months, but this will save time in the end because it will prevent accounting errors caused by human error on your part. Link

#3. Hire a Bookkeeper to Do Your Monthly Reconciliation

If you don’t want to create your bank reconciliation statement every month, it might make sense to hire a bookkeeper to do it for you. You can use an online service like Homebase-IoT Group if you’re short on time, yet still want professional-quality bookkeeping services.

When you work with one of our top-notch accounting firms, you’ll get access to experienced CPAs and seasoned accountants that can help identify tax-saving opportunities, prepare financial statements when needed, or handle other essential tasks associated with running a successful business. Link

#4. Don’t Rely Solely on Software for Accounting Purposes

Most entrepreneurs are busy enough without having to worry about keeping track of all their expenses and sales. This is why it makes sense to use a software product like Homebase for your bookkeeping needs, but you should also consider hiring an accountant or bookkeeper to handle the monthly reconciliation.

You’ll save time by using automated accounting software, but be sure to make this decision based on your financial situation rather than convenience alone. It might make more sense for you to get expert help with your numbers every month because you have other priorities that need your attention instead of doing everything yourself. Link

#5. Focus on What’s Most Relevant

As a business owner, there are lots of things that can distract you from focusing on what matters when it comes to running and growing your company. Use tools like cloud accounting software to help automate your bookkeeping tasks so you can focus more of your attention on other things.

That said, there are still far too many entrepreneurs that take an unorganized approach to their accounting activities because they’re too busy or just don’t know how to get started. You can avoid this problem by focusing on the financial metrics that will help you stay in business over the long term. Link

#6. Take Advantage of All Available Tax Deductions

Tax deductions exist for a reason, which is why you shouldn’t overlook them when filing your tax return. If you want to save money with every sale or receive more from each paycheck, then it only makes sense to do everything possible to reduce your tax liability as much as possible.

There are lots of small business owners that don’t know about all the available deductions, which is why they’re not saving as much money as they should on their taxes.

#7. Never Assume That You Know Everything there is to Know About Taxes

If you receive an unexpected tax bill or are audited by the IRS, then this might be a sign that you need to try harder when it comes to planning for your taxes. Even if you use cloud accounting software, it’s possible that you won’t claim every deduction or credit that you deserve because you simply aren’t aware of them yet.

This is why it makes sense to take advantage of online resources like Homebase-IoT Group where experts can help answer your questions and show you how to improve your financial situation. Link

#8. Keep Track of Every Mile You Drive for Work

If you use a car for business purposes, then it only makes sense to keep track of every mile that you drive. Even if you have someone else do the driving most of the time, this is still a good idea because there might be times when you need to reimburse them for mileage driven on company business.

The IRS allows you to deduct up to 56 cents per mile without any documentation, which is why it can make sense to take advantage of this tax break as often as possible. To take these deductions at tax time, all you’ll need is a record of how many miles were driven and what the total amount is after applying the appropriate rate. Link

#9. Send Electronic Invoices to Reduce Hassle and Paperwork

If you’re like most entrepreneurs, then you probably send some form of paper mail daily. You might pay bills or send out invoices to customers, which all make use of some kind of paper product even though the world is becoming more computerized every year.

Fortunately, it’s possible to reduce this hassle by taking advantage of e-invoicing software that can help automate this process for you. Since these solutions are accessible online, they’ll allow you to manage your accounts receivable through one central hub instead of having everything scattered across multiple apps or files. Link

Conclusion: There is no better way than using cloud accounting software to stay on top of your business bookkeeping activities. 

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