Accounting is tiresome for any business organization, but if the business doesn’t keep tight books it can lead to giving the business owners nightmares related to taxes. Without a proper system for the business’s finances, there are chances that many things can slip through the cracks and end up costing the business owners more money in the long run. One should follow a clear-cut method and few simple bookkeeping tips to ensure they get a good grip on their financial situation and even increase their earnings as well. The aim is to get a simplified process created detailing your business’s finances. One should adopt a method that combines the expenses, invoices, deposit details, and tax-related information can make the life of a business owner a lot easier, especially when the tax season takes place.
If one is considering outsourcing the business’ bookkeeping, then FinAcc Global offers the best accounting and bookkeeping services that ensure accurate operational and financial detailing. Luckily, bookkeeping is simple if one takes a little time, use the right tools. Follow these tips to get the bookkeeping accurately and quickly, so one will be prepared while filing the taxes with confidence.
Tip #1: Always keep business and personal finances separate
This is very crucial for any business. Business finances must be kept separate from the personal expenses that should be done from the initial point of purchase. If this doesn’t take care then one will end up with a lot of mess of expenses as there will be too many account statements that need to be sorted out and labeled at the end of the year.
It is important to limit the crossover, never use the personal credit card for work-related purchases and in the same way, never use the business amount or credit card for personal purchases. There is also a possibility that one could miss out on some valuable deductions because they were not able to accurately identify them.
Keeping business and personal finances separately is quite time-consuming too, but it can lead to bigger issues if not separated in the worst-case scenario as the IRS might catch up too. It is highly recommended to maintain a separate personal bank account as well as a separate business bank account. As it will help in many ways that include:
- Gives the business owner the to quickly monitor the business expenses without any hassles.
- Supports perfectly in well-organizing the accounting records
- Aids in establishing the business credit rating
Tip #2: Go Paperless, choose accounting software
Before depositing the first business check or record the first expense, choosing accounting software would be better. The modern accounting software has revolutionized business bookkeeping, it will ensure to save a lot of countless hours of productive work as well as rework, in the long run, those hours can be invested for growing the business. Accounting software offers everything that one requires to manage well the firm’s accounting. The software keeps a thorough track of deposits, invoices, pay the bills, reconcile the accounts and check printing.
Choosing accounting software that is exclusively designed for business owners will be a good idea, as they offer platforms that consist of built-in templates that offer easy input and track basic items. Not just this, the accounting software is also essential for keeping accurate details all in one place it securely stores all the required information at a reliable location so the business owner can access it easily and file the taxes correctly during the end of the year.
Tip #3: Keep thorough records of business transactions
Make sure to keep and well-organized all the accounting records that include receipts, invoices, sales, expenses, these can break or make the business’s books. One can save a lot of time scanning and digitizing the receipts. Keeping all the necessary documents handy will support in quickly and easily record and track the transactions. If there are no accurate records then there are chances that the business will suffer financially.
Tip #4: Track your essential financial reports regularly
The best way to keep up with the bookkeeping is to keep a strict schedule and vigorously review the firm’s financial reports regularly. If the bookkeeping is put off for a longer time it can result in overdue invoices, bounced checks, figures that don’t sum up. Go over the books twice each month, go through the firm’s deposits, withdrawals, transfers, purchases, and other important items to make sure everything is ship-shape.
There are three essentials of financial reports that one should be reviewing:
· Balance Sheet – This report shows all the information about the liabilities and assets the business firm owns. This is also where one can find the payables i.e., what they owe to the vendors as well as outstanding receivables and the details of the balance of each.
· Income statement – This is also called as the profit and loss statement. This will show all the expenses and sales that got incurred. This clearly gives the report of all the assets that came like the revenue generated as well as the expenses that went out of the business during a period of time that includes a month, quarter, or a year.
· Cash flow statement – This is the same as the income statement, the cash flow statement reports the money coming in and going out of the business over a period of time. The difference between the income statement and cash flow statement is that the cash flow statement shows only money, whereas the income statement shows non-cash accounting, like real estate value and equipment depreciation.
Money is the lifeblood of any business. Stay on top of the business by choosing FinAcc Global accounting and bookkeeping services. Contact our expert team and take care of all your financial needs like a pro.