If you are the regular small business owner, chances are that there is probably nothing that you hate doing more than bookkeeping. No surprise there because unless you have a head for numbers, it can be an arduous task. Unfortunately, whether you like doing it or not, it is essential to keep your business afloat and to keep you out of trouble with the IRS. So, here are some bookkeeping tips for small businesses that will keep you on top of your finances and make your life easier.
- Set Up a Bookkeeping Process
It is essential that you have a bookkeeping system and that everything is not in your head. Don’t take bookkeeping lightly. When the IRS comes knocking, you will definitely not be laughing, so make sure you have a system. If you don’t know how to proceed, get professional help.
- Keep Aside Tax Money
Who doesn’t dread tax time, but you can make it better for yourself by setting aside the money systematically throughout the year. You know when you have to pay your taxes, so be prepared and make sure you have everything in order. It would be wise to remember that the IRS can penalise you for not filing quarterly tax returns on time.
- Record Expenses
One of the basic rules of bookkeeping- record your expenses at all times no matter where you are. If you do not know where your money is going, you are en route to financial ruin. You will also need the information for your taxes; otherwise you might end up missing some tax write-offs.
- Track Deposits
Another basic of bookkeeping for small business- make sure you record all your deposits and incomes accurately. Tracking expenses and deposits are important to ensure that your activities balance each other out. Besides if you don’t, you might end up paying taxes on money that isn’t income.
- Following Up On Invoices
Any small business will fall if the pile of late and unpaid bills continues to mount, so it is vital that you have personnel dedicated to following up on billing and collecting payments on time. If your cash flow is hit, you will find yourself in serious trouble.
Bookkeeping for small business may not be easy but you can make it easy for yourself by following these simple bookkeeping tips for small businesses.