We fully recognize that accounting and bookkeeping tasks don’t win popularity contests. Yes, they are right up there with dentist visits and cleaning out the sock drawer for most. But like most evils, these tasks are extremely necessary. While we can’t offer a pass on the tasks, we can offer you a few time (and in essence money-) saving tips to make thee items less inconvenient and more in your rear-view mirror.
Keep Your Banking Organized
Many small businesses, especially those that have recently grown from a sole proprietor situation, often co-mingle personal and business accounts too much. Of course, this isn’t sinister, most often – especially in early cash-strapped times – personal funds are often loaned to a business during tight times. However, becoming too comfortable with quick cash exchanges can damage your finances long-term. First, always make certain you have separate accounts set up. Then, set regular, if modest, owner draws for your “salary” as the business allows. Try to limit owner loans to the business to larger, more organized infusions instead of a little here and a little there. You are investing in a business – even if it is your own. If the owner had a different name, we doubt you’d invest $250 at a time.
Track payments by not relying on cash.
Cash may be king, but it’s still a dangerous, dangerous thing for a business owner. While you might be tempted to pay for a few office supplies or infrastructure needs in cash, you’ll pay more in the long run for not filing the receipt, or even worse forgetting the entry until too late in the process.
While it’s always fabulous to avoid business debt, utilizing a business credit card for business expenses and paying it off as quickly as possible creates an automatic electronic record of an expense. It’s simply not worth the risk or the habit, even for a few bucks.
Manage Credit Card Debt
Speaking of credit cards, make sure that your purchases on a business card are truly worth a credit extension if they can not be paid off immediately. Using credit cards only for convenience can be dangerous if you’re not diligent about paying balances timely, as interest rates can quickly cost you more than paying a vendor directly. Also, be mindful of vendors that you might set as reoccurring expenses, such as software subscriptions or social media advertising. These small expenses explode if you neglect to pay them timely each month.
Also, make certain any employees that have business credit cards are clear on appropriate uses. Put all policies in writing, especially if your employees use this for travel. The last thing you want to do is deal with an employee that wants to reimburse you for personal expenses while you’re dealing with other bookkeeping tasks.
As we mentioned earlier in the section about cash, electronic recording of expenses saves you a lot of hunting for unnecessary paperwork. The more paperwork, the more daunting a bookkeeping task seems to be. Whenever possible, quickly turn paper receipts into digital records by utilizing accounting software digital apps or scanners. Be sure that you also keep an email folder where you can quickly tag any electronic invoices. This not only helps you keep things paid on time, but also protects you from searching hundreds of emails when you need to record an invoice.
If you’re still feeling a bit overwhelmed after these tips, it might be time to call in some help. Talk with our professional staff on how we might be able to design a plan to decrease the mental angst and burdens caused by your bookkeeping situation.