Bookkeeping Tips for Small Business Owners

There are lots of small business owners who need help with keeping track of their finances. The bigger your company becomes, the more financial tools you will need to help your business succeed. Here are five tips for you:

1. Budget for significant expenses. Be honest about one-to-five-year expenses. Are facility upgrades likely? Worn-out office equipment?

Seasonal ups and downs of your business can affect your ability to spend.

By budgeting and forecasting extensive renovations or personnel peaks, you’ll avoid moving money out of the company in solid months and being short in slow months.

2. Track spending. Hard-to-track expenses may cause you to miss tax write-offs.

Using the business account and the business credit cards, instead of cash or paying from personal funds, can help track costs. Most software providers now categorise your bill, saving you a step.

To prepare for audits, note the clients you meet for coffee dates, lunches, and activities in your calendar. This will prove your costs if you’re audited.

That includes tracking mileage. When driving long distances to meetings, log your mileage or use Google Maps to calculate the costs.

3. Correctly record deposits. Keep track of what’s being put into your business bank account. Was it for an invoice you sent to a client, a non-invoiced sale/cash sale or transfers from personal funds or other business accounts?

Throughout the year, you’ll likely make several deposits. From loans, sales, and savings. If you can’t account for each deposit, you may pay taxes on non-income money.

4. Save tax money. You know when to pay taxes. So save up. Unpaid taxes can entail fines and interest, so be prepared.

Putting money aside each month or when a contract is paid will be less painful.

5. Check your bills. Unpaid debts hinder cash flow—delegate billing. Create a plan for delinquent accounts. This includes sending a second invoice, calling, and charging late fees.

Plan for 30-60-90-day late clients. Every late payment impacts your cash flow.

As a small business owner, it’s up to you to ensure your financial records are organised, filed, and available when needed. Whether you choose a professional or an in-house bookkeeper, ensure you’ve got the tools you need to succeed.

Need help with bookkeeping? Sudoku Bookkeeping offers Initial Business Health Check for MYOB, Xero or QuickBooks files. Contact us today.