Chances are you run a business because you’re good at something and you like doing it, not because you enjoy filing receipts and entering accounting information. Yet, if you don’t take the time to keep your books current, you’re really hurting yourself. Not only will you have some serious headaches come tax time, but you also won’t really know how well your business is doing.
That said, you don’t want to spend more time working with the numbers than what’s absolutely necessary. Here are a few ways you can cut down on the busywork portion of bookkeeping and get back to doing what you do best:
- Use a reliable accounting software package. There is a slight learning curve with implementing a solution like QuickBooks, to be sure. Fortunately, there are all sorts of training resources out there. The time that you spend learning to use QuickBooks will more than pay for itself in terms of efficiency later on. Even just using it to input checks, reconcile your various accounts, and create regular reports will be a huge boon to your business.
- Don’t put off updating your records. Small business owners generally don’t enjoy doing the books. After all, you got into the business because you’re passionate about something – and it’s not likely accounting. Still, by spending a few minutes each week to keep your records updated, you’ll save tons of time over the long haul.
- Avoid using cash. Cash generates extra record-keeping and puts you in a situation where you may lose out on various tax deductions because of a missing receipt. Debit cards really are the way to go, as they generate not only the receipt that you get at the point of sale but the bank statement, as well. Obviously, there are times when you need to use cash, but those instances are few and far between these days.
- Keep your business and personal accounts separate. This is a major mistake that many new business owners make. Even if you’re a sole proprietor and your business income and expenses truly are your personal income and expenses for tax purposes, bookkeeping is much more difficult if your accounts aren’t separate. Keeping separate accounts will also help you down the road if you want to form an LLC, incorporate, or try to get loans or grants for your business.
- Consider going paperless. By scanning in receipts, you can free up a significant amount of time over the long run. Not only that, there are a number of third-party applications that will allow you to attach scanned receipts to your QuickBooks data. The key here is to make sure you have reliable, regular backups of your accounting data. You should export that data regularly to an external hard drive or a flash drive, and consider storing it offsite or in a fireproof safe. (more…)
