What do all successful businesses have in common? They’ve managed their finances effectively with good bookkeeping habits.
Every business – no matter its size – needs an organised financial recording system to keep track of its expenses. Adopt these 5 bookkeeping habits to stay on top of your business’s finances.
- Invest In the Right Software
Having a good bookkeeping system is crucial. By investing in the appropriate software from the beginning, you’ll be able to streamline your bookkeeping process, creating, managing, tracking and assessing your expenses efficiently by yourself.
With so many accounting and bookkeeping software options out there, it’s important to find the right one for your needs. Check out reviews online, or ask your contacts what software they use.
The right accounting software will help you to stay on top of your company expenses, allowing you to complete your bookkeeping processes faster and more easily, with optimal results.
- Keep Your Receipts and Invoices
Hold on to all of your receipts and invoices to keep track of your company expenses. Cash expenses can be harder to keep track of, so it’s a good idea to keep a notepad handy to record these expenses. This will help you monitor your profit and loss down to the last dollar.
Accounting software should help you keep track of your receipts and invoices, and notify you of outstanding balances. Downloading an accounting app onto your smartphone is a great way to log your receipts and invoices as you go, so you don’t have to hold on to the paper copies.
- Track Your Receivables
Sure, you can hand out invoices, but the important thing is to make sure your invoices have been paid. Keep track of your invoices and their statuses to ensure no outstanding payments slip through the cracks and leave you at a loss.
Some accounting software can do this for you, highlighting your invoices as sent, received, paid, partially paid, and late, and even notifying you when invoices are late or unpaid.
- Update Books Regularly
You should be updating your books every day or week to make sure there are no errors. This is also the best way to see how your business is doing in terms of profit and loss, giving you a clear and regular insight into your financial position and operations.
- Get Help from a Professional
Bookkeeping can be complicated if it isn’t your area of expertise, especially when it comes to tax-return time. And many entrepreneurs simply don’t have the time to take care of their bookkeeping processes on their own.
Using a professional accounting service can really help your business on the path to success. Whether you rely on a professional to take care of your finances all year round or to take a look through your books once a year, getting qualified, experienced people on your team is the best way to ensure any potential issues are sorted and you receive a better return come tax time. If you aren’t sure where to start when assessing someone’s qualifications, try to look for industry memberships – if they belong to industry networks like the Australian Bookkeepers Network, they are more likely to be reputable and efficient.
A good accountant will work alongside you like a business partner, offering their expert insight into your business.