We all know that End of Financial Year (EOFY) can be stressful, but what if there were some tips to make bookkeeping for your business easier throughout the year and make for a smoother and less stressful EOFY and get your business run more efficiently?
Keeping your business books up to date and accurate can give you a better grip on your financial situation, giving you confidence when it comes to making decisions about your business.
Well here are some of the best tips for bookkeeping you can implement year-round to help your business thrive.
1. Budget for Major Expenses
One of the best things you can do in order to manage cash flow for your business is to budget and plan for any major expense that will occur throughout the year.
It is important to set aside money for any expected larger expenses such as
- inventory,
- office supplies,
- any repairs and maintenance.
You should also be able to predict and account for recurring costs such as:
- rent or mortgage payments
- any professional membership fees
By building these into your budgeting, you can save a lot of stress and worry in the future about having to find the money to meet your financial obligations.
2. Keep Track of Bills and Invoices
Missing or making late payments of your invoices can affect your credit and also have possible tax implications.
If you keep your invoices organised you can make sure bills are paid on time and also avoid any penalties or surcharges for late payments. Or better still you may be able to take advantage of any discounts offered for early payments.
3. Conduct Regular Check-ins on Accounts Receivable
Having a client that owes you money on the books is not the same as having received that money into your business account. Without receiving these payments business revenue dwindles and cash flow can suffer. This can then make it stressful trying to meet your financial obligations.
Staying on top of Accounts Receivable might not be a glamorous task but it is an important one when it comes to running a business.
4. Go Paperless With Cloud Accounting Software
Not only is it environmentally more sustainable but with the addition of cloud-based accounting, it has never been easier to stay on top of your bookkeeping.
With cloud-based systems like Xero, you can access your business information from anywhere at any time. You can make use of apps on your phone to do things like upload receipts, add bills, create quotes and invoices and reconcile your bank account on the go.
It also makes it easier to share financial information with your accountant when necessary.
5. Avoid Cash
Where possible try and avoid using cash to make payments. Using cash can make it harder to keep track of your spending. You may also miss things that can be written off because there is no record of purchases. Using a business debit or credit card for purchases can make it easy to watch what is being spent as well as where and when. This will make tracking and claiming business expenses easier.
6. Keep Personal and Business Finances Separate
While it may seem like no big deal when first starting out to make a personal transaction on a business account or vice versa, it can actually make keeping accurate financial records very difficult. It’s a lot easier to keep accurate records when only dealing with one type of account, and will save a lot of time by keeping business and personal separate.
We have talked previously about why it’s important to keep personal and business financials separate.
7. Find a Good Bookkeeper
The right bookkeeper for your business is a huge asset. They can help you put systems in place to handle your books properly, answer any questions and fix any mistakes. They can also provide training so you can get the most out of your accounting software.
8. Make Sure You Reconcile Your Bank Accounts Regularly
Checking back accounts and reconciling your business withdrawals and deposits regularly makes it easier to spot and fix any discrepancies before it gets overwhelming and out of control.
Set up your software to recognise transitions that will occur on a regular basis such as monthly bank fees. This will help save time when it comes to reconciliation.
If you use these tips to help with your books, it will have your bookkeeping running smoothly and stress-free. You will be able to spend less time worrying about business finances and working towards your business goals.
