What will your New Year’s resolution be?
As a small business owner, it’s likely that one of your New Year’s resolutions is to get organized, stay organized, or tackle that overwhelming pile of paperwork in your office. You’ve been focused on building your business, but in the process, your bookkeeping may have suffered, potentially resulting in lost money and a lot of frustration. Additionally, every lost invoice or receipt less deduction could lead to an audit from the IRS (or CRA for Canadian readers).
After you’ve filed your business taxes for the year, it’s time to get a handle on your bookkeeping so it doesn’t control you. Here are our top five tips for keeping your bookkeeping organized:
- Invest in bookkeeping software. QuickBooks is a popular choice for small businesses because it’s user-friendly and easy to set up. It can handle a variety of bookkeeping tasks, such as tracking accounts payable and receivable, entering payroll, reconciling your bank account, and tracking inventory. Bookkeeping software makes it easy to track all of your business activity and quickly find invoices when you need them.
- Set up a system for tracking mileage. If you frequently drive for business purposes, it’s important to keep clear records of your mileage and travel expenses. One way to do this is to keep a log in your car and enter the odometer reading before and after each business-related trip. Include the date and the reason for the trip. At the end of the month, transfer the information to your bookkeeping software or consider using a mileage tracking app like Trip Cubby or Mobile Mileage, which also allow you to take pictures of receipts.
- Synchronize your bank and credit card statements. You can usually request that your credit card and bank statements end with a month-end cutoff date, which makes it easier to match expenses and reconcile your statements. If you haven’t already, consider setting up automatic bill pay to avoid missed payments.
- Stay on top of invoices and receipts. Make sure you’re keeping track of all invoices and receipts, including those that you receive electronically. Use a system for organizing and storing these documents, such as a file cabinet or cloud-based storage. Consider setting up a system for recording and paying bills in a timely manner to avoid missed payments.
- Review and update your financial records regularly. Set aside time each month to review your financial records and update them as needed. This will help you stay on top of your business’s financial health and identify any issues or areas for improvement.
By following these tips, you can take control of your bookkeeping and reduce the stress and frustration that comes with disorganization.