Small business bookkeeping is just one of the many tasks every business owner must handle. Successful businesses know that in order to stay afloat, they need an efficient process for everything from tax forms to inventory.
Staying on top of your small business bookkeeping can be tough, but doing so will give you better control of your business expenditures and a better idea of your profit margin. Here are some tips to help you better manage the bookkeeping for your small business.
- Separate your business and personal bank accounts It can become hard to keep track of business expenditures and profits if small business owners only use one bank account for both business and personal finances. Depositing business income into a separate checking account can help owners better manage their records and keep track of cash flow in case your business gets audited.
- Keep track of business receipts Saving receipts for all business expenditures, no matter how small, is important in order to have an accurate overview of how your business is doing financially. In order to deduct business expenses, the IRS only requires receipts for business expenses over $75. However, keeping track of smaller expenses, and documenting petty cash flow, can help keep a small business’ books in order so that there are no surprises about the state of its finances in the future.
- Detailed inventory records are important Small businesses often times don’t have the benefit of a large staff to take care of tasks like inventory maintenance which are important, but often overlooked. Having a proper inventory process can help small businesses prevent employee theft, or misplacement of merchandise. These records can also help businesses track customer shopping trends and ensure efficient buying in the future.
- Know when to get help If you choose to do your own small business bookkeeping, you still may want to consider consulting a CPA to learn the most efficient ways to handle business records.
- File employee forms properly Hiring employees means that you are responsible as a small business owner to file the appropriate employee tax forms like the W-4 and the I-9, and manage your worker’s compensation, unemployment and employer matching records.
Handling your small business bookkeeping doesn’t have to be a struggle. By implementing these best practices, you can successfully and accurately gauge your business’ performance.
Tell us! Does your small business do its own bookkeeping? What are some financial hardships you’ve faced and how did you overcome them?