There are many challenges and fast-moving pieces in a small business, it can all become very overwhelming quickly to owners. While there are many daily activities that come with owning a small business, one thing that does not differ based on the industry is bookkeeping.
Having delays or inaccurate bookkeeping can quickly turn into a financial nightmare, making it impossible to grow your business and secure capital without having accurate and up-to-date books. If you find yourself not being caught up with your business’s bookkeeping, there are a few things you can do to get yourself back on track.
Step 1: Collect Receipts
If your receipts are not organized, it’s important to collect them and bring them together. You will need to gather all of your receipts, invoices, and any other financial documents related to your business, this includes records like:
- Vendor accounts
- Bank statements
- Credit card statements
- Business expenditures and revenue
- Customer accounts
Step 2: Fix Bank Accounts
Next up, time to check your records and then check them again. It’s important to sit down with your credit card and bank statements. These should always match your business records and other accounts. If you find any discrepancies, find the error and resolve it. Discrepancies and human error are common problems for business owners who don’t use a bookkeeping service.
Step 3: Separating Personal and Business Expenses
A vital step to catching up on bookkeeping is taking measures to prevent any discrepancies in the future is separating your personal and business expenses. If you have already done this, awesome, move on. If you haven’t, it’s time to separate those expenses to keep your books clean and up to date.
It’s recommended that you keep these accounts separate for filing your taxes. If you don’t, you could be help responsible for any loans your business may have.
Step 4: Lose the Paper
Deciding to go paperless will make your life so much easier as you will be able to update your books automatically. Since you have already gathered your receipts and documents, create a digital record of all these financial documents. You can choose to do this on your own or by using online tools and software.
Step 5: Gather Tax Documents
Tax season is an important time of year for everyone, but most of all for businesses that need to file any forms for the next tax year. If possible, consult with a bookkeeping professional or service to make sure you have gathered the necessary forms. Once your bookkeeping is updated, keep it that way.
Step 6: Review Everything with a Professional
Once your bookkeeping is caught up, it’s highly encouraged that you use a tax professional to help you keep it that way. A tax professional can remove much of the stress and help you keep your records organized.