Running a small business is difficult enough without having to worry about managing your finances. Luckily, with a little preparation and a focus on your expenses and income throughout the year, you can save yourself a lot of headaches come tax time. Below we will dive into our top bookkeeping tips for small businesses – read on!
Tip #1: Dedicate Time to Review Weekly
You should always know the state of your bank accounts and understand what’s coming in as income and what you’re spending on expenses. To save yourself time in the long run, we recommend dedicating time each week to review all your business’ finances. This preventative financial maintenance will ensure you’re never stuck in a tough spot.
Tip #2: Keep Your Accounts Separate
Even if you’re the only employee of your business, you should always keep your business and personal bank accounts separate. Frequently, business owners will wait until their business takes off until they create a separate business account, however, spending the time to create a business account at the onset of your business will keep your future finances almost headache-free.
Tip #3: Plan for Expenses
While this may seem like a no brainer, you would be surprised how many people rely on credit cards as opposed to saving up for an upcoming expense. With credit card interest rates sky-high you can quickly become riddled with debt and delay any financial progress you may have made with your business. Spending a little time upfront to save for major expenses will ensure your timeline for financial success isn’t slowed down.
Tip #4: Keep Records
To save yourself some money when tax time comes around, have your receipts and records of business purchases so you can create itemized deductions for a tax write off. Now you don’t have to save every single receipt but think ahead to the ones you would like to write off – usually larger expenses. You can easily keep them all in one place by scanning paper receipts or by using the same business credit card for each purchase.
Tip #5: Stay Ahead of Tax Timelines
Businesses are on a different tax schedule than individuals, so if you’re new to the business world, we recommend spending some time to understand your tax deadlines so that you can plan ahead. If you don’t pay your taxes on time, you will face fines, so double-check that you don’t have any tax deadlines coming up!
If you’re finding your business finances to be too much for you to handle at the same time as running your business, consider hiring professional bookkeeper to manage your business’ finances. Give us a call today to discuss your financial needs!