The Golden Rules of Bookkeeping

The Golden Rules of Bookkeeping

Unless crunching numbers is what you do for fun, bookkeeping is probably the least exciting part of your day. There is likely a multitude of tasks in your head: which clients are outstanding, which supplier you need to pay, and the list goes on – leaving bookkeeping chores at the end of your priority list.

Keep in mind, however, that practicing good bookkeeping habits on the onset of the business can help you avoid costly mistakes in the long run. Having the right system and processes in place prepares you for unpleasant surprises and challenges.

No matter how daunting maintaining your financial records can be, it is an essential part of running your business. In order to make it a little less tedious and help you have a healthy bottom line, My Virtual Workforce put together the five golden rules of bookkeeping for your small business.

Start the Day Organised

Whether you hire someone else to manage your figures or do it on your own, make sure that an easy-to-follow and organised system is followed right from the start. Doing so makes it easier for you to maintain and monitor the task as your business grows.

You may search for various bookkeeping processes on the web and find one that you think will be ideal for the size of your business and accomplish it.

Foresee Major Expenses

Do not just settle for the probable expenses you are going to make for the next quarter. Envision what you will be doing for the next two to five years. Chances are, you will need to upgrade your facilities, add more people in your team, revamp your office equipment and so on.

Moreover, recognising the seasonal ups and downs of your venture is critical as these can have a big impact on your budget. Forecasting major expenditures steers you clear of wanton spending, and as such, keeps you financially equipped in both the good months and the bad.

Keep a Schedule

It is essential to save a portion of your weekly agenda tracking your finances and updating your records. Depending on the volume of invoices you receive, you or your bookkeeper can work on the task approximately for an hour or two on a weekly basis. This can be done much more easily if there is a good accounting system in place that provides quick entry fields and handy drop-down toolbars.

Always remember to monitor your expenses and keep them together. Make notes in your calendar, such as who you will be meeting for coffee dates or lunches. This will help you keep an account of your transactions, helping you substantiate your records when tax time comes.

Budget for Tax

A portion of the profit you generated belongs to the tax man. This is why it is imperative to budget for this as you go, so at the end of the fiscal year you won’t struggle shelling out money from the company for the tax. Open a deposit or business savings account where you can set aside what’s due for the tax.

Creating a separate account for taxes you owe from each paid receivable puts you in a better position come the time to file your taxes. So in case there is a deficit, you already have money to back you up.

Outsource a Bookkeeper

You may have discovered that by running a venture you spend almost an entire day looking after your paperwork instead of doing what you enjoy. If you come to think of it, using your skill set and strengths to build your business is more rewarding than worrying about the issues with your records.

By outsourcing your bookkeeping tasks to a certified bookkeeper not only do you save management time, staff overhead, and operating costs, but you also frees up essential capital and hone your proficiencies so you can manage your business dynamically.

You may want to check out more reasons why you should outsource a bookkeeping service here.

That’s all it really takes to handle your finances. Keeping these five golden rules of bookkeeping in mind will definitely pave the way for your business success.

The post The Golden Rules of Bookkeeping appeared first on My Virtual Workforce.

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The Golden Rules of Bookkeeping

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