If you’re in the throws of starting a new business, now’s the time to get a handle on your books. Once your business is thriving and your cash flow starts moving, you’ll benefit from having a solid strategy when it comes to your bookkeeping. Keeping track of your income and expenses, recording-keeping of receipts and monitoring your invoices are all part of the job. Here are 5 bookkeeping tips for small business owners.
1. Separate business and personal
Don’t wait until your business is booming to properly set up your bank accounts. Once things start to get busy, it can be an absolute nightmare trying to untangle business with personal. Set up your business bank accounts right from the start and make sure all transactions are processed through those accounts. This will also help you quickly determine your cash flow, as you can easily see your income versus your expenses.
2. Prioritise your books
As a new business owner, you have a million and one things to do. While it can be tempting to avoid your books and focus on the actual running of your business, it’s best to actually prioritise your books. Make time from the very beginning to keep control of your paperwork, and you’ll be thankful in the long run, particularly come tax time. If you’re struggling to make time for your books, it may be worthwhile hiring the services of a bookkeeper to help you.
3. Do your tax research
Small business tax requirements differ greatly to individual income tax, so it’s important to know your obligations. Keeping accurate records of your spending and expenses from the start, including proof of purchase, will increase your chances of claiming deductions when tax time rolls around. A basic understanding of your tax requirements is crucial when starting a small business, so you can ensure you’re following all the rules.
4. Plan for major expenses
It can be hard to foresee every expense coming your way, but if you can plan and prepare for major costs, you’ll be in a much better place long term. Build in a contingency plan, where you forecast for large expenses, such as inventory, supplies, maintenances, staff costs and tax on a regular basis. A large part of bookkeeping is managing your money well, so you set your business up for success long term.
5. Invest in cloud accounting software
Make it even easier to get a handle on your books with QuickBooks software. You can download the app and keep an eye on your finances at any time. You’ll also love the receipt capture functionality, so you can do away with the shoebox of receipts under the bed. You can also use QuickBooks to invoice and receive payments, track your GST, lodge your BAS and instantly report on your business finances – saving you time and money.