A robust bookkeeping system is essential for the health of any business irrespective of its size. It is a tedious but necessary procedure for any business or company house as it helps you get the complete perspective of your business finances, identify and work upon loose gaps and increase your earnings. Thus, the importance of doing it the right way cannot be overemphasized. We therefore, share with you some practical and essential ten bookkeeping tips that will help you keep your financial record sensible and updated.

  • Bookkeeping is something that must be done on a regular basis at regular intervals like daily, every alternate day, weekly, etc. A dairy can be maintained as well. It will not only keep things organized but will also eliminate misses and errors in bookkeeping records and keep things smooth and updated.
  • It is imperative to maintain your personal and business finances records separately. Not implementing it will make things messy and complicated. You would not be able to decipher your business health correctly.
  • It is imperative that you keep track of all kinds of receipts, expenses, invoices, etc. They should be filed away so that no error occurs and are readily available when needed. This could be slightly hassling. A terrific alternative to it is to use online and cloud computing bookkeeping software which gives you real-time reporting and automates most tedious bookkeeping functions.
  • Even if you are using a good accounting software; you need an expert advisor and accountant who can handle the books, keep them updated, identify any errors and make available the data as and when required.
  • It is crucial that your chart of accounts is simple and functional. It is nothing but the categorization of the financial transactions of your business. It is best to keep them generic and without overcategorization so that your records remain streamlined.
  • All businesses require some significant expenses like inventory, repair and maintenance, upgrading office essentials etc. You also need to take seasonal ups and downs of business into consideration. If you plan for these critical expenses for the next three to five years; you would find yourself in a comfortable position and not taking out money from the business during peak times.
  • Another critical point to note is to keep your tax and compliance obligations in order. They come at a time when you already have enough financial commitments. Saving money beforehand for paying your taxes at year end always turns out to be a smart idea. You can avert much of your financial crisis in this way and avoid paying extra as tax penalties.
  • It is equally important to develop a robust filing system. All your sales and purchases invoices must be maintained diligently here. The banking features like net-banking, electronic transfer etc. should be used optimally and bank statements regularly updated and recorded so that you do not miss on a single invoice.
  • Another good idea is to develop a numbering system for your paperwork and relate it to the accounting software. It could be for instance month wise and later yearly basis. The system would help you pull out any past records within the shortest possible time whenever required.
  • Finally, you can hire experts but you must push yourself to acquire the basic knowledge of the entire bookkeeping process. You would be surprised at the world of difference this little endeavor would make to the overall health of your business.

 

With these bookkeeping tips; you would be able to keep a tab on your business financials with the least hassle and concentrate more on taking your business to scale heights.