5 Easy to Follow Bookkeeping Recommendations for Small Businesses

5 Easy to follow bookkeeping recommendations for small businesses and entrepreneurs. Keep company financial organized to save money & time.

Yes, it is all about organizing your receipts, invoices and employee paperwork. This blog does not contain any financial advice, it is purely a bookkeeping blog which will give you practical tips organize your books.

1 Keep a Record of Everything

I would say paper trail but that would date me too much. Since a great portion of transactions are done online. Digital records are very important and acceptable. Whether they are paper records or digital records, make sure that anything material is written down, easy to read and saved. Material information includes, dates, amounts parties involved and description of the business transaction.

Keeping a record of everything may not sound as a time and money saving tip. But, having all the information will save you a ton of time when tax season comes around. Other instances when you will save time is when you need to make reference to a project or need to duplicate it. If you have all the information properly organized it will be a breeze and will not have to research vendors and other details. Having all your company records will also save you time looking for invoices and receipts when you need to verify, confirm or contest a transaction.

2 Keep Records Organized

For both physical records and digital records, I recommend filing anything by year, then by project or subject. To be more specific and to provide an example, for the year 2022 you should consider having the following binder, filing cabinets or equivalent digital folders for:

• Employee/New Hires/Contractors records
• Customers organized by Project Name, include any contracts, invoices and payments records
• Account payable (A/P) records organized by vendor’s last name or company name.

Keeping your records organized as mentioned above will save you time and therefore money when it is time to do your taxes.  Whether you do your taxes yourself or hire an accounting service to do them for you. 

3 Use, a Paid Bookkeeping Software Program

Next tip, and probably the most practical of them all is to use an accounting system or software that ties everything together and will summarize your transactions in two handy reports for any specific period: The Profit & Loss and Balance Sheet. These will give you, and your finance team and managers a snap shot of how the business is doing.

Quickbooks is my favorite, I am biased I know, because I have worked with Quickbooks for over two decades. But it is relatively easy to use or learn how to use. Quickbooks offers different plans you can choose from depending on the size of your company and it’s needs. In addition, Quickbooks is scalable, meaning that as your company grows Quickbooks has a plan that can handle your companies needs. Most importantly Intuit’s customer service is excellent. 

Avoid free bookkeeping services, unless you are willing to pay for some of their services. Think about it, why would a for profit company provide any or prompt assistance if there is no way for them to make money. This reminds me of my very fist lesson, in my very first economics class in college….”There is not free lunch”, meaning people are not going to give you anything of free. If may not be a cash transaction, but it may be your data or information they are after. Be cautious, wise and be selective when picking a software to handle your books.

4 Hire a Bookkeeper

This next practical tip, is an extension of the last one. Let’s face it, we don’t know what we don’t know. Even if the bookkeeping or accounting systems or software you selected seems easy to use, you need to know the basics of bookkeeping and accounting to classify all your transactions properly. Hiring someone, from the beginning, will save you a ton of time, and in the long run, that translates into saving money.

The best recommendation and advice I can give you give your bookkeepers or accountants all the information they need to their jobs without having to verify, double check or request time and time again information from you. For this, make sure all invoices and receipts have been revised by person who purchased them and corresponding approvals and assigned projects or business expense categories are listed and are easy to read either on the invoice, receipt or forwarded email.

5 Make it easy for your bookkeepers and tax accountants to do their job.

Yep! You guest it. Follow all of the above recommendations. Provide them will the complete information in a timely manner and be reasonable providing ample time for recording all business related transactions properly.

Bonus tip to this 5 easy to follow bookkeeping recommendations for small businesses

Keep your personal transactions separate from your business transactions. First, you will have a clear picture of how your enterprise is truly doing. Remember this blog is all about saving time and money. Whether it is you or your bookkeeper, it takes time to sort out transactions; therefore, it is not practical at all for the business to spend time and money sorting your personal transactions.

Contact us if you have any questions.