Effective bookkeeping is critical for the success of small businesses. By keeping accurate and up-to-date financial records, you can make informed financial decisions and ensure the financial health of your business. However, bookkeeping can be overwhelming and time-consuming, especially if your financial records are disorganized. In this blog post, we’ll provide bookkeeping advice and offer tips for getting organized for better bookkeeping.
Establish a Filing System
A well-organized filing system is essential for effective bookkeeping. Establish a system for organizing receipts, invoices, and other financial documents. Consider using folders or envelopes to separate documents by category or date. For many items, electronic copies of receipts, invoices and other financial documents can work just as well as paper. Even electronically, you will need a filing system to make your data easy to find when it is needed.
Create a Chart of Accounts
A chart of accounts is a list of all the accounts used in your bookkeeping system, covering assets, liabilities, equity, income, and expenses. The establishment of a proper chart of accounts is a crucial step for creating a system that will work for your business over the long haul. This is an area where consulting a professional like an accountant or CPA can be very useful. Too many accounts will bog you down. Too few accounts could lead to inappropriate accounting as well as the inability to dig into meaningful details about your business operations.
Use Bookkeeping Software
Bookkeeping software can help you streamline the bookkeeping process and save time. QuickBooks is a popular option that offers a range of features to help you manage your finances more effectively.
Set Up Regular Updates
Set up a regular schedule for updating your financial records, such as weekly or monthly. By establishing a routine for updating financial records, you can stay on top of your finances and avoid falling behind. Set meetings with yourself on your calendar and then keep them just like you would if you were meeting with a client. If you let the time you blocked for these tasks get consumed with other requests and activities, things can rapidly snowball out of control and leave you with a mess.
Reconcile Your Accounts
Regularly reconciling your accounts is essential for ensuring accurate financial reporting. Reconciliation involves comparing your financial records to third party statements such as your bank statements, credit card statements, and outstanding loans to ensure they match. This should be done monthly, or as frequently as you receive the support. Don’t let this slip. Going through 30 days of data may not sound like fun, but you will do a better job if you tackle this regularly instead of letting it pile up and then having to deal with 3 months of data or more.
Seek Professional Help from Haworth & Company
If bookkeeping is overwhelming or if you have questions about managing your finances, consider seeking professional support. Our team of bookkeeping and accounting professionals at Haworth & Company can provide bookkeeping advice on how to manage your finances more effectively and provide valuable insights into financial management. Our monthly accounting programs are specifically tailored to the needs of small businesses to help them stay on top of their finances. Contact us today to see how we can help you.
