Simple, To-The-Point and EASY Bookkeeping Tips for Small Business Owners

Simple To-The-Point and EASY Bookkeeping Tips for Small Business Owners

Starting a small business doesn’t have to be complicated, but it does take thought and require attention to detail. One of the biggest points of confusion that you’ll encounter is bookkeeping — not because bookkeeping is hard, but because people often don’t know where to start. Here are some very easy tips that we know will make handling the financial side of your business go a lot more smoothly.

Start Simple and Then Expand

Arrange your business and expenses so that they are as simple as possible when you first start out. If you’re on your own with no employees, register as a sole proprietor and use the cash method of accounting if possible. All the cash method is, is that you don’t count income as received until you actually have it in your account. Once you have a handle on the basics, then you can start adding more costs in.

Please Remember Your Taxes

Something that many sole proprietors don’t do is set money aside for estimated taxes. They figure that if their income varies, there’s no way to predict what taxes will be. However, it is very easy to predict that you will owe taxes, so start to set something aside. Make a category in your budget for taxes, and even set up a separate savings account to store a percentage of each payment that comes in. If you don’t, you could end up with a huge tax bill the next year, and possibly debt as you try to pay off the amount.

Get Your Emergency Money in Place

Another budget category to have is emergency funds, if you don’t already have those. Build up at least a couple of months of living expenses as quickly as you can; expand that to six months if possible. This fund will cover shortfalls in income and prevent you from spiraling into debt. Every little bit helps.

Make an Accounting Appointment With Yourself

Ensuring your books are complete is essential to running your business. Work on your budget at the same time every week to ensure that you have entered all receipts and paid all necessary bills. When you’re in the habit of working on your budget, it’s a lot easier to see where things might be going off the rails.

You would benefit from meeting with a financial advisor or bookkeeping service to see how your record-keeping is going. Services such as ours can help you track down leaky holes in your budget and assist you with getting everything organized for each tax season. Contact us to set up an appointment and keep your business’ books on track.