- Get Professional Help When Needed
- Save All Your Financial Records and Back Them Up
- Keep Track of Inventory
- Plan for Major Expenses
- Automate Whatever You Can
- Do Regular Checkups
- Learn to Understand Monthly Bookkeeping Reports
- Keep Business and Personal Banking Separate
- Decide Who Should Maintain Bookkeeping
- Keep Track of Cash
The success of a business depends on many factors. Good bookkeeping is one of them. Timely and competent bookkeeping enables to file taxes without any problems and promotes the development of the enterprise. In addition, accurate bookkeeping allows the manager to obtain reliable information about the finances of the enterprise or company at any time.
Get Professional Help When Needed
You should not be afraid to ask for help from an expert or ask questions whenever you are in doubt or simply do not have the necessary knowledge or experience. No matter which direction you develop your business, it is important to professionally organize your bookkeeping. This is where a professional accountant or accounting firm can come in and help.
There are many accounting firms that offer consultation or help with any part of bookkeeping or accounting on a one-time basis. Among BooksTime reviews, there are reviews that tell how customers benefited from professional bookkeeping support:
Our experience working with BooksTime has been fantastic. The level of technical knowledge, the follow through and attention to detail, and the upbeat, service-oriented attitude of our accountant, Jennifer Page, are absolutely top notch.
Executive Director of BMS
Not all enterprises can maintain an entire department when its services are only needed periodically. BooksTime allows you to transfer key bookkeeping and accounting tasks to their team of highly qualified specialists.
After all, trying to figure out how to file taxes or prepare monthly, quarterly or yearly reports on your own are unreasonable if you do not have the required knowledge. Even if you had relevant education and do not need to spend a lot of time researching everything online, you will still be spending your valuable time. You could this time to search for ways to improve your business operations, attract investors, etc.
Professional bookkeepers and accountants have all the necessary knowledge in the field of accounting, constantly adding to their experience, perfectly mastering innovative techniques and computer technologies. Bringing in an outsourced accountant can enable you to successfully cope with large volumes of work that must be done in a short time.
This specialist can also look for ways to optimize the company’s expenses and perform many other important duties. A professional accountant regularly monitors changes in legislation, which allows him or her to competently perform his or her duties and ensure the stable operation of the enterprise.
Save All Your Financial Records and Back Them Up
Businessmen know how important it is to submit tax and accounting reports on time and correctly. Otherwise, there can be serious problems. However, do not assume that keeping records does not require the same responsibility. On the contrary, the storage of tax and other financial reports is very important, and you need to comply with certain legal rules, terms, etc. The law requires a business to keep many documents and financial records often for several years.
Any company has at its a variety of documents accumulating on a daily basis. If you put them together – you get real mountains. Most of the information in these papers are confidential. This may include personal data that the personnel department stores, as well as contracts, a lot of various accounting and financial documents, acts, advertising materials, etc. You will need to store most of these documents for some time even after your business is closed, in case there are any issues.
Keeping all your bank and credit card statements, profit and loss statements, balance sheets, receipts and invoices for sales and services is very important for numerous reasons. Managers and owners will use it for analyzing and planning business activities. These records can also be used as a proof for an auditor or tax authorities, as well as proof of scam. Additionally, keeping a record of all your expenses will allow you to write off more during the tax season.
Bookkeeping needs to be prioritized from the beginning. Catching up after the fact can be difficult, and crucial data can be lost. But how do you keep up and store these piles of documents? Of course, you can file all the papers in your office and keep them safely in a strongbox or other place dedicated specifically for this.
Modern document storage technologies, on the other hand, help companies store both the papers needed in their daily work and the information on which is used very rarely in an organized and reliable manner. You can store electronic versions of all the papers on a hard drive and back it up somewhere, such as in the cloud. One of the advantages of cloud-based bookkeeping software is that all your critical financial data is backed up safely off-site and is always easily available.
Document management solutions allow business owners, even when they are relatively small, to properly store and organize their documents. It is much easier to know which documents you are missing and where each document should go for easy future retrieval.
For an accurate reflection of your business operations, you will need to keep all your receipts, whether they are for office supplies, equipment, business trips, or anything else. To make this easier for you and your bookkeeper, it is recommended to make payments with your business credit card whenever possible. This way, the transaction records can be retrieved from bank reports.
Keep Track of Inventory
Almost every company requires some kind of inventory to operate. A small business owner needs to understand that proper inventory management is more important than for larger companies. It can make or break business operations. The sooner you start keeping track of your inventory, the higher the chances that your business will be successful.
Small businesses usually do not have an employee who is responsible solely for keeping inventory records up to date. To ensure that these records are correct, it is necessary to check all the inventory against the records. This overview helps to monitor that every item is accounted for in the inventory book, which records every inventory movement in the company
Inventory loss and theft of property are often identified during such reviews. If your inventory is properly tracked, you will be able to see if there are cheaters in your company and if there is a need for disciplinary actions. Otherwise, it means you’re your employees do their job diligently and deserve applause because accurate inventory is a major management tool that has multiple benefits.
If there are objects that are not taken into account in the bookkeeping records, or if the information is incorrectly recorded, then they should be recorded with the correct information. This will allow you to know if you need to order or produce more, how much you have to sell or use, etc.
Accurate inventory tracking is important for business planning. Inaccurate inventory tracking can lead to a number of pitfalls, putting both your inventory and customer service in jeopardy. For example, you might not be able to complete the order in a timely manner, which can turn away your customers. Also, you might order or make another batch just to find out that you already had enough and now the items have no place to be stored or can get spoiled. In any case, regular checks are a necessity.
There are many ways to make inventory tracking easier. Good inventory management will help analyze what you need when you will need it and in what quantity because it will keep track of inventory in real-time. An ability to scan bar codes will help to speed up this process. However, good inventory management software does not eliminate the need for periodical physical inventory audits.
Plan for Major Expenses
All major expenses and events should be included in your business plan. During the ups and downs of your business activities, you will be able to prepare for the upcoming expenses and be able to pay for them even when your business is experiencing a slowdown in sales, etc. When something breaks down or you want to upgrade equipment to improve the products or services, it will be very hard for you to make it happen if you have not planned for these spending
s ahead of time.
No matter in which field you operate and what size your business is, there will always be large unexpected expenses. These can be both expenses that you can foresee and need to cover to implement your business ideas as well as unforeseen expenses, such as natural disasters and legal troubles, whether it is your customers suing you for something or presence of cheaters and scammers in your company who screwed your financial records.
For these reasons, every business owner and manager needs to have a plan of action for every possible situation, and the funds to cover them. Come what may, no business ever regretted having a safety net and did not have to take money that is circulating in their business.
Your taxes are another major expense that you can plan for and put money aside each month or on another regular basis. This way you will be able to avoid any negative consequences, such as penalties and interest, that unpaid taxes can cause to your business. Set a deadline for your tax payments (you might be required by law to do it quarterly) and easily pay them with funds you set aside.
When you regularly set aside money for major expenses, it will be less noticeable for you and your business operations, and you will always have peace of mind that you are ready for anything life can throw your way. Whether you are looking to upgrade your office, test a new service or just having a safety net for slower times, your company is prepared.
Automate Whatever You Can
Automation of bookkeeping at your company will reduce the costs of bookkeeping, as well as improve the quality of reporting. To automate accounting means taking many tasks that a person performed and transferring them to a computer. Most often, these functions are mathematical operations for calculating taxes, total sums, data storage, filling of sample documents and forms, accepting and making payments, etc.
Transferring your bookkeeping workflow from manual to automatic will not only reduce staff costs but also take out the chance of human error, which in this context can be extremely costly. All the details of your business will be processed automatically with complete accuracy. Additionally, all the data input in this way can be created automatically into reports in a variety of formats with ease.
The automation of accounting allows you to create different registers for the different types of documentation that saves time when you need to refer to the required document. Using automation programs saves you time on interdepartmental communication and interaction with government agencies (tax, social insurance service, etc.) remotely and without mathematical errors caused by human factors.
All financial and economic activity becomes clear for the manager and fully controlled. Thus, it is possible to take appropriate measures promptly and in a timely manner. Moreover, significantly reduces the chance for scammers and cheaters to tamper with the records. In many automation systems, there are updates in which changes in the legislation will be automatically incorporated. Automation allows you to efficiently and easily obtain financial and business data, as well as making interdepartmental communication clear and convenient.
All business transactions of an enterprise can be tracked in real-time, which further reduces the likelihood of deception and fraud. Also, it is impossible to do without automation when a company wants to regularly monitor its financial and business activities. It facilitates data grouping options, sampling, and sorting. All these advantages ultimately make management decisions more efficient.
If the company conducts an effective personnel policy, automation will help to successfully implement the goals and efficiency. The automation of accounting documents is necessary if the specifics of the company’s activities require a quick response to certain requests of counterparties and buyers. For example, an account can be instantly generated, the documents can be signed using an electronic signature and will reach the addressee in a fraction of seconds.
The market has a large number of services and programs for automation of bookkeeping. The choice of a technical automation solution depends not only on the needs of a particular organization. It is also necessary to focus on the program itself. The choice should take into account the characteristics of each program, as well as its quality and reliability of the output data. As with many products, user reviews, as well as professional consultation, will be helpful
Do Regular Checkups
You need to check your finances on a weekly, monthly and quarterly basis even if you hired a bookkeeper who seems to know everything about bookkeeping. Weekly checkups will allow you to catch any unpaid or late payments that would negatively affect your cash flows or see figures that do not add up correctly due to your bookkeeper’s incompetence, simple human mistakes or even scam. In fact, knowing that the bookkeeping is checked regularly can deter scammers and cheaters from fraudulent action.
Weekly and monthly reviews of your financial records not only allow you to ensure that everything is top-notch but also give you a quick overview of the effectiveness of your business strategies and reveal possible shortcomings. To ensure that this process is as efficient as possible, it is suggested to schedule a monthly bookkeeping time just for this. This will ensure that you actually get to it and will do it properly because you will have no other tasks planned for this time.
Quarterly or yearly analysis of financial statements can be done by professional accountants and auditors. The main objective of the audit activity is to check the financial documentation for accuracy, scam, deception as well as assess the financial situation of the company. Such a socially significant role imposes a special responsibility and requires professional competence, honesty, independence and objectivity from the auditor. Thus, you need to carefully examine reviews of the auditor you choose before entrusting him this task.
Having this information automated allows the owner to make sound decisions based on accurate information. Additionally, the auditor can offer alternatives to such decisions and probable consequences. Therefore, it is in the owner’s interest to make an audit of his company and receive a report.
Thanks to the audit, you can significantly reduce fines and financial losses that can be incurred due to inaccurate bookkeeping. This also helps to catch cheaters and gives you a more accurate evaluation of company standing. Only a good audit firm is able to perform all these tasks. The money you will pay for its services will be insignificant in comparison to the amount you will be able to save by seeing a more accurate overview of your operations as well as avoiding fines and losing money due to scams.
Learn to Understand Monthly Bookkeeping Reports
Bookkeeping is not only important for calculating taxes, as many entrepreneurs used to think, it is also necessary to get a quick overview of your business state, evaluate and analyze your business operations and make certain forecasts for its development.
Having a system for tracking cash flows, assets, liabilities, and income of your business allows you to create reports that help to make thoughtful and reasonable business decisions and always have an idea of the state of the business as a whole.
Thanks to a clear, organized accounting system, you can not only analyze the financial data of your company but also help it grow and make a profit. Knowing where your company is financially in terms of income and expenses will help you better understand what you need to do in the future to maintain this level or to ensure further growth.
Bookkeeping also helps you keep track of who owes you what, and what you owe to someone. It helps to keep track of salaries and loans, attract potential investors, maintain a budget, and provide all the necessary tax data. It will also allow you to reveal scam and deception if it is present.
You will not be able to catch a cheater or take advantage of the information presented in the reports if you don’t understand the content or what should be included in these reports. Thus, no matter if you are planning to do all the bookkeeping yourself or not, you need to learn the basics of bookkeeping to understand what all those numbers mean for your business, starting with the balance sheet and income statement.
In fact, if you decide to become an entrepreneur, then the issues of bookkeeping and taxation for you become relevant from the day you make this decision. Yes, even before you register your legal entity. At the stage of drawing up a business plan, you need to have an understanding of the tax system, how many employees you’ll have, the basics of labor law, how your documentation will work, and much more.
Why do you ask? Because since the registration of a legal entity, the entire responsibility for violations of tax laws, administrative and criminal responsibility falls on you, the head of the company. You can attract specialists based on reviews, but even in order to assess the level of their professionalism in tasks you entrusted to them, you must be well-versed in this matter yourself. However, do not let this scare you because you just need to understand the basics of bookkeeping, which can be easily learned.
Keep Business and Personal Banking Separate
Many entrepreneurs know the stressful situation when there is not enough money to run a business or to meet personal needs, especially if the business is just starting to grow. To improve a business, you have to take funds from your own reserves or, conversely, withdraw funds from business income for your own needs.
Owners believe that the mixing keeps the startup afloat. But it is not true and sharing funds inevitably always leads to unpleasant consequences. There is also an increased chance that the owner might not notice that cheaters and scammers in their company, who have access to funds in one way or the other, easily steal money and conceal it as the owner’s personal spending.
In big business, the funds of the owner and the business are kept separately and independently. The company has its own income to pay for expenses and, if necessary, investors are attracted or loans are taken, and the owner regularly receives dividends – part of the net profit and return on investment. The most difficult situation is with small and medium businesses. For 80% of the companies in this segment, there is no qualitative separation of funds.
Even a businessperson who has consciously come to the decision of the need to separate personal money and business money can often experience difficulties, primarily psychological ones. After deciding to split the budget, it should be remembered that the end result of the efforts will be well worth it. You will see a disappearance of the difficulties associated with the constant transfer of money from the business to personal budget and back.
What are the negative consequences for small and medium-sized businesses from the unclear separation of funds?
- The company is unstable. The owner can take from the business account more money than the resources of the company allow. The result is regular financial difficulties.
- It is impossible to assess the quality of work of a top manager. The management does not react to any discrepancies in the funds due to the mixing of funds. Thus, it becomes difficult to control the cash flow.
- Business does not develop. Achievement of strategic goals becomes impossible because the financial state is unclear.
Benefits from the division of funds:
- Actions of the owner do not lead to the company’s obligations not being paid.
- The company has an opportunity to grow and execute a financial plan.
- Funds are used more efficiently.
- Strategic goals are achieved.
To separate personal and business money, you should withdraw a certain percentage of the income of the company on a monthly basis. You can never withdraw from a business an amount greater than the size of your net profits without a strong need.
You should also keep track of spending for business trips gas, for example, separately from personal gas spending for personal reasons, just like other employees and record the receipts in the appropriate bookkeeping accounts. Among reviews about BooksTime, you can find reviews such as the one following about business owners taking steps for better expense management.
BooksTime provides full-service bookkeeping for my company, from payroll and invoicing to bank reconciliation and cash flow analysis. Their expert advice and high-quality work allow me to focus on my business, not the books.
Founder of Icelandic+
Try to minimize the infusion of your own money into the entrepreneurship. The ideal option is to attract finance from outside investors or diligently record all your personal investments. Creating two separate budgets and financial plans for personal and business finances will help to better follow the decision two keep the two separately.
Decide Who Should Maintain Bookkeeping
The answer to this question for a new business depends on how quickly you expect to grow. Often entrepreneurs decide to save money and maintain all the records themselves. However, later they realize that we’re doing everything wrong or not as effective as a professional could have done it. They can also simply spend too much time on bookkeeping instead of focusing on strengthening and growing the business.
Thus, hiring a bookkeeper right from the start or using external accounting service will be the best way to go, unless you are doing something on the side from your main career for additional income and want to keep records for personal and tax reasons.
At the same time, it is very good when the entrepreneur themselves participates in bookkeeping and accounting. It is very important that entrepreneurs are well versed in financial accounting, especially in the early days of the existence and development of their own business.
The selection of a financial specialist usually takes a long period of time and requires a serious approach. After all, bookkeepers and accountants keep record and process all or almost all cash flows of the company. Thus, some can end up being cheaters, who steal money from the company and successfully hide it (at least for some time).
A good accountant is hard to find, so the risk of making a mistake is quite large. The results of the wrong choice of a specialist can appear only during an audit. In this case, the management of the company was deprived of all chances to promptly correct the situation.
You might not only realize that the bookkeeper did not do his work correctly
and in a timely manner, but also reveal a scam that you were not aware of. Thus, it is important to contact previous employers or read reviews if you decide to work with a firm that provides bookkeeping services.
When recruiting staff, the owner or head of the company faces a dilemma: to look for an employee with years of experience and well-developed expertise or to hire a young specialist. Each option has its pros and cons.
Take a look at an overview of both:
- Bookkeeper and accountant with extensive experience
- Professional knowledge and experience
- Ability to solve complex issues
- Fast and accurate fulfillment of duties
- Expect a high salary
- Less motivated to work on-call
- Less flexible, may not share company values
- More capable of committing fraud and scam
- Bookkeeper with no or little experience
- More willing to learn and adapt
- Moderate salary
- More loyal to the company
- Lack of experience or relevant experience
- Need for training and support
- More chance for unintentional errors
In most cases, small businesses can get away with a bookkeeper with little experience after a professional accountant or accounting firm have setup everything correctly and save money. An experienced, professional bookkeeper and accountant can create reports, analyze the financial state of the company and make forecasts on a monthly, quarterly and yearly basis. Professional bookkeeping and accounting firms can perform only the tasks you need, and you will be able to save additional funds.
Today, bookkeeping and accounting services that offer qualified assistance in the maintenance of day to day bookkeeping, payroll, making financial reports, preparing tax forms and much more are provided by many firms. The reviews of their customers will help you to navigate and select the most appropriate one from the entire list of companies and ensure that you do not stumble across scammers or cheaters. Look for reviews like these:
Our company came out of the dark ages finding Books Time. The everyday service demands of our small family plumbing and heating business gave us little time to look at the numbers and make sense out of them. We were lucky to even have a handle on how much money was really coming in and out, let alone how much was really in the bank. Four months in, we now know immediately where our accounts stand and can begin to plan ahead financially. Books Time staff have tutored us through the entire process and every month our confidence in understanding the systems increases. Books Time has helped us get a new grip on our business and organizing us for expansion down the road, as well as streamlined the time we spent laboring through numbers.
22 of April
BooksTime has some of the most knowledgeable, detail-oriented and dependable bookkeepers in the industry. They have helped put bookkeeping in reach of the even the smallest small business. It’s a delight to work with them!
Romeo J. Ibanez IV
26 of April
Keep Track of Cash
Needless to say, cashless payments are rapidly occupying almost all spheres of human life. It’s no wonder, after all, this is a very convenient and fast way to receive and pay money. Economic entities are also attaching increasing importance to cashless payments. Sadly, they are not in a hurry to say goodbye to cash payments entirely. Cash is still used by many enterprises and entrepreneurs and therefore the issues of proper handling of cash are still relevant.
Cash is often used to accept payment from customers for goods sold, work performed, services provided, rent, reimbursements, small business expenses such as office supplies, as well as in a number of other cases. Working with cash is a tricky task. Therefore, it must be organized as knowledgeably as possible.
To do this, you first need to indicate who will be responsible for organizing and maintaining cash operations at the enterprise (cashier, accountant), list persons who are responsible for the cash during your temporary absence (vacation, sickness, etc.), where cash will be stored, in what amount, who should replenish it, and establish the frequency of the cash check among other necessary provisions.
Proper cash management will allow you to cut
on unnecessary expenses as well as ensure that there is no scam or cash stealing. Most businesses keep cash in a locked box or other secure location. However, you might also have cash in the cash register during the day, which will require you to check it at the end of the day to ensure accuracy and place it in a safe place until the next working day.
Cash transactions that are made for reasons other than operating the cash register can be recorded in several ways. There are always paper and pen options, or you can take advantage of Excel spreadsheets and make records there. In any case, these records will need to be included when you will be making financial reports. If you are using bookkeeping software to keep a record of your other finances, it will be easier to create a separate cash account and record cash distributions there.
I tried out multiple bookkeepers before finding BooksTime with little success in regards to setting up the Quickbooks platform so that it integrates with my Ecommerce site, Amazon and manages my inventory all at the same time. BooksTime took their time to set it up properly, was always extremely communicative, and very thorough in cleaning up the mess I had made along the way. I highly recommend them for your bookkeeping needs and especially for those who have had trouble managing multiple channels and inventory through Ecommerce, retail, direct, etc.
I strongly recommend BooksTime. Sonya and her team at BooksTime provide us with the highest level of service imaginable. Since we signed up in 2015, all our finances have been managed perfectly. We never have to worry about accounting or bookkeeping thanks to them. They take care of any requests we have very quickly and always make themselves available for us. They go above and beyond to meet any need we have!
Given the level of service and expertise they offer, BooksTime’s rates are surprisingly affordable. Their hourly rates are really competitive. Also, it seems like they put a lot of effort into working as efficiently as possible, which results in them working quickly and consequently billing fewer hours than we’d expect from a normal bookkeeper.
If you have any accounting or bookkeeping needs, I can’t recommend them highly enough — BooksTime is by far the best option out there. I look forward to working with Sonya and her team for many years to come.
We entrusted BooksTime with a critical initiative to reorganize our financial data. BooksTime maintained a rigorous quality assurance process to ensure that no data was lost or misclassified. Whether helping with projects big or small, the team at BooksTime delivers reliable, high-quality service every time.