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Small Biz Bookkeeping Tips!

Small business money management tips

Your business may be on the small side but that does not excuse it from the importance of bookkeeping, far from it. Why?

Because money is involved in business and bookkeeping is the best way to keep track of money - where it comes from and where it is going to. With that said, here are five top tips for small business for an effective and efficient bookkeeping system.

  • Use the Appropriate Accounting System

    Too many small businesses fall into the trap of adopting either the simplest or the most complicated form of accounting system. You must find the balance between an accounting system that answers your business' needs and your personal understanding of it.

  • Use Computer Software

    We live in a computerized world so it is only logical that computers must be used for bookkeeping purposes. You will also enjoy the benefits of fast, easy and convenient tracking of income and expenses, which means more accurate, relevant and timely tax documents, accounting records and financial statements.

  • Keep the Supporting Documents Organized

    Your books of accounts, be it in the computer database or in handwritten ledgers, may be organized but it will still be in vain if and when the supporting documents are in disarray. During audits, you want these supporting documents like official receipts, invoices and checks to be in proper order for easy retrieval. This also goes for your checks, be it the blank, issued and cancelled ones. With that many fraudsters today, checks are often the most vulnerable "assets" of a small business.

  • Maintain Daily Records

    This is one of the most basic rules in bookkeeping. You have to update the records on a daily basis mainly by entering the financial transactions on the books of accounts as these occur, often in real time. You will also appreciate updated records when the time for tax payments and submission of financial statements come up. It will be so easy to transform the trial balance into the many financial reports necessary.

  • Be Mindful of Safe Information

    You may think that your small business is too, well, small to even be considered for fraud but stranger things have happened. You must install passwords in your computerized accounting system and keep your documents in a safe place just to protect yourself.