9 bookkeeping tips for the new year
Accounting and bookkeeping are tedious tasks for a small business. Without a defined system, it can get overwhelming and small oversights can lead to costly errors. Especially as the New Year arrives, businesses need to get a tight rein on their books and ensure they are ready for the tax season. Accurate Tax and Bookkeeping shares a few tips to help small businesses across the year.
1. Create a Budget
A budget is the foundation of resource planning acquisition as well as usage. It is a valuable benchmark to help gauge the success of the management in achieving set objectives. A budget is the map of the company’s strategic plan that determines various other factors.
2. Maintain Daily Records
It is imperative to do a little bookkeeping every day so the year-end is not an overwhelming phase where all records go haywire. Even in the absence of a sophisticated bookkeeping system, it is important to maintain a daily record of operations. Consistency pays.
3. Create a Storage System
Store all records for every year together. From the tax return for the year, bank statements, canceled checks, paid bills to financial statements and any revenue or expense-related backup files, everything is important for a bookkeeper or the reviewing authorities. Scanning or taking pictures of all receipts are advised in case the ink fades away over time.
4. Keep Separate Accounts
A separate personal and business account is necessary for a simple and smooth accounting and auditing process. Mingling personal and business funds can be an accounting nightmare as differentiating between the two can become very cumbersome and confusing. Moreover, if a business wants to access a loan or the tax authorities want to review the business transactions, the business owners will have to give access to all information, personal and business.
5. Review Financial statements
Review the monthly bank/credit card statements to ensure that the relevant revenue or expenses (including bank charges and other fees) on the statements are accurate. This will prevent overstating income or understating expenses due to unauthorized or personal use of a bank account and/or credit card.
6. Stay on Top of the Receivables
Reviewing the accounts receivables regularly and actively working on collecting payments to protect the business from losses is important. Develop an efficient system to track overdue invoices, send polite and friendly messages after sending the invoice to confirm receipt, and follow up with a reminder 2 to 3 days before and after the due date.
7. Set up a Petty Cash Box
Create a petty cash box for frequent small purchases to avoid losing track of the smaller purchases and losing potential tax deductions. Paying for these smaller purchases and misplacing the receipt can prove to be a nuisance later during tax season.
8. Review & React
Regularly review the financial performance of the company. This will allow business owners to recognize and address potential problems, continue doing what is working, and gather the insights needed to enhance the business performance. This review can help make adjustments in the spending or tweak the business strategy.
9. Be Realistic – Outsource Accounting Function
Accounting and bookkeeping are no child’s play. Being organized all year round and ready for the tax season requires a lot of time and effort. This daunting task can be managed easily by a professional bookkeeper, increasing the business’ efficiency and freeing up time to focus on business growth. A consultation with a bookkeeping service such as Accurate Tax & Bookkeeping can help businesses recognize their specific accounting and tax needs as well as advise them on what to track and when.
Accurate Tax & Bookkeeping Services specializes in handling financial needs for businesses of all sizes.
Greg J. Menia founded the tax preparation service company in 2010, having worked in business tax services since 1995. The team performs tax services for small businesses and large businesses alike, serving all areas around Tampa, FL.
Call (813) 655-9702 today for “accountants near me” in Brandon, Florida. Alternatively, contact Greg and the team at Accurate Tax & Bookkeeping Services by emailing [email protected] or visiting the offices at 710 Oakfield Dr. Suite 159, Brandon, FL 33511.