Tips To Stay On Top of Bookkeeping for Businesses

Are you managing your business’s books well? Look, one of the keys to helping your business succeed is to ensure that your books are always in order. Good bookkeeping skills will help you stay on top of finances, see where your business is growing or where there’s potential for growth, and get everything in order for when tax season rolls around.

For those with businesses, new or old, the bookkeeping never stops. You can either get overwhelmed by it or take the time to read these tips and get on the right track to better financial management. What do you say? Are you ready to try mastering bookkeeping?

1. Create a Reliable Filing System for Your Business

A reliable filing system is the foundation of your bookkeeping system. With an organized system, you can ensure all your paperwork and documents can be pulled up within a few seconds. No stress of scratching around for old receipts and invoices because you’ll know exactly where everything should be.

There are a few essentials to help you create a filing system that works for your business. This can either be done manually, on a spreadsheet, or both. This filing system should include but is not limited to, folders for your invoices, receipts, customers, suppliers, bank statements and taxes (of course).

Using spreadsheets can help you organize your information into columns and rows for easy referencing. Using formulas, you can do some calculations automatically. No need to spend precious time summing up totals for accounts and invoices with your calculator; let technology help.  

To create an effective and reliable filing system, here are a few things you can do:

• Organize all your documents into folders based on purpose
• Use a spreadsheet to store and organise data and include formulas to calculate totals or create summaries
• Ensure the filing system is accessible to all necessary members of the team so they can use it efficiently
• Having a guidebook outlining your bookkeeping process that explains which accounts and records should be updated when certain events occur and how to enter different types of data is incredibly helpful and will help minimise data entry errors

2. Always Ensure your Data Integrity

The key to good bookkeeping is always checking that your data is accurate. This may require you to double-check all your invoices, receipts, vendor documents, and everything else, but the more accurate your calculations are, the less you have to stress about your finances. Any errors in the data entry process need to be corrected immediately to prevent inaccurate entries.

Also, an important way to ensure your data integrity is maintained is by trying to eliminate human error as much as possible. Everyone involved in the bookkeeping process of your business should be equipped with a guidebook that outlines the protocol for bookkeeping. This will ensure everyone follows the same standards and procedures and leaves minimal space for error.

3. Track your Payments Properly

Following up on ensuring data integrity is making sure you’re tracking all your payments properly. It can definitely be a challenge, but it’s absolutely essential. The best way to track your payments accurately is to set up an easy-to-use system that documents when invoices are sent out and when payment is received. This system should also keep track of refunds, discounts, and various adjustments.

To keep tracking as accurate as possible, embrace automation, and you can minimise human error caused by tracking payments manually. Automatic systems also help save time and can also send reminders to help you stay on top of invoices that need to be sent out and payments that need to be collected.

4. Use Good Bookkeeping Software

An effective way to minimise the stress around finances is to use bookkeeping software like Xero or Quickbooks. Different bookkeeping software is designed to automate processes to help ensure all your records are accurate and up to date, and it includes many other beneficial features, including financial reporting, invoicing, and payment tracking, to name a few. It also allows you to access data from virtually anywhere, which is incredibly helpful for remote businesses or those with multiple locations.

It’s essential to research the different software options to be able to find the right one for your business. You need to look for bookkeeping software with features compatible with existing systems and processes.

Having the best bookkeeping software doesn’t mean anything if you don’t know how to use it, so take the necessary time to learn how to use it effectively. You can always test it out before committing to ensure it’s one you’re comfortable with using. It’s also important to ensure you have secure access and that your team can use it. It’s equally important to ensure your team is trained to use the software properly. Take the time to back up your data so nothing is lost.

5. Always Adhere to Deadlines

Keeping to deadlines is essential to keeping on top of your business’s bookkeeping. When you miss deadlines, which may include tax filing dates, daily morning bank reconciliations and monthly or quarterly reports, you run the risk of rushing and causing inaccuracies in your records or paying hefty penalties or fines.

To ensure you’re aware of upcoming deadlines, set up a reminder system, whether it be emails, notifications, daily alarms, or anything that works to keep you aware and ahead of the deadline.  

6. Consider Outsourcing

For those who don’t have effective bookkeeping systems in place and are unfamiliar with bookkeeping software, handling financial records can be a huge stressor. In cases like this, outsourcing bookkeeping services can be worth the extra expense as it could save you money in the long run.

Final Thoughts

In business, bad bookkeeping is a costly mistake. So, it’s essential to set up systems to help you maintain accurate financial records so you’re always aware of your business’s financial strength, ahead of the deadlines, ready for tax, and so much more.