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This article is all about how to keep your bookkeeping files in order for new startups, or general bookkeeping information.
My first major tip for the financial side of your business is to find yourself a good bookkeeper. Here’s Why…
You can do your own bookkeeping, but, many business owners find that it takes time away from their real duty. Managing and growing their business. It is very important though that your year end bookkeeping is extremely accurate and updated. This is where it is very helpful that you have a qualified bookkeeper who is ultimately going to end up saving you time in terms of efficiency, because they know what they’re doing and they’re gonna save you money because they know the tax system inside-out. Your bookkeeper can give you very very good advice.
There’s nothing wrong with you doing your own bookkeeping on a daily basis, however, if and when you get behind, it can be very time consuming to catch up. That’s where you tend to make expensive mistakes.
My best piece of advice here is that you do your bookkeeping on a regular basis, sort of little and often, rather than wait until the end of the year to kind of compile all of your accounts, because otherwise you’ll end up with this mad rush of trying to find all your receipts and tally everything up. Instead of trying to do it by piecemeal on a daily basis and eventually making your bookkeeping chaotic, try and do just 5 to 10 minutes per day. This will save you time, and money when it comes to the end of the year because you’re not going to have to pay your accountant to do all of that legwork for you. Having an accountant or CPA do all the menial bookkeeping work, especially if your receipts and other paperwork is a mess, will be very expensive.
The second tip, is really about what you need to understand about the basics when it comes to what you need to do to keep your bookkeeping accurate.
You will know about what your gross profit margin is, and what your net profit may be if you stay up to date on your bookkeeping. You don’t need to know the complicated kind of financial forecasts necessary, but you just need to understand the basics in terms of your profit and loss account.
Your total income, gross profit, is that revenue minus, your direct costs, or direct expense. Your net profit is based on your revenue, minus your direct cost, also minus your overhead. Your overhead is the day to day costs associated with your business.
Other things you might consider and understand are balance sheets, and the cash flow forecasts for your business. If you own your business property and vehicles, these can be a liability, so if you’ve got long term loans, those assets and liabilities don’t tend to show up in the profit and loss accounts.
A cash flow forecast really is about trying to prepare yourself for the future, so if you understand where your business is financially, you can see how much cash is coming in and going out of your business. This lets you prepare for any unknown expenses and forecasted expenses, and lets you know potential problems which might crop up in the future.
Daily bookkeeping allows you to know your business key performance indicators. You need to know on a monthly and weekly basis what target you should be aiming for.
My third tip… is what tools you might want to choose to use in terms of your accounting bookkeeping. There’s some really great tools out there, cloud-based tools for doing bookkeeping and those include things like zero QuickBooks and sage, to name a few.
There is however, a steep learning curve with any of these tools, so be prepared to make mistakes, have questions, and be stressed, until you learn how to use these tools.
If you didn’t have a dedicated bookkeeper looking after your books, and you’re just a one-man band or maybe you’ve got four or five employees, you are still going to be doing your own bookkeeping. a little each day makes it that much more manageable.
If you have a specific question please don’t hesitate to visit my website at PINNACLEBOOKKEEPING.US, and ask me a question. we generally respond within 24 hours.
Stay updated on your bookkeeping needs by book marking this website. There will be many bookkeeping hints over the next few months.
Stay updated on your bookkeeping needs by book marking this website. There will be many bookkeeping hints over the next few months.We look forward to being of assistance for your bookkeeping needs.
Larry