No matter how big or how small your home business is, you must have a bookkeeping system in place. You must keep accurate records so that you can stay on top of all your profits and losses. Businesses have failed because the owner had no idea of how the money was being spent, what money was coming in and what bills needed to be paid. Here are seven tips that will help you with your bookkeeping needs.
1. Stay Organized
Being organized is extremely important for any small business owner. It’s a good idea that you keep all your receipts in one place. Do not worry if you can’t sort them right that minute; just be sure you keep them all in one place. This way, every two weeks or every month you can easily get to them and sort through them. This is a very important task that you should make a habit.
2. Keep Personal and Business Expenses Separated
You should never mix your personal receipts in with your business receipts. You need to keep two separate containers, one to hold the personal receipts and one to hold the business receipts. This will make it much easier on your when it’s time to sort through and record all the receipts.
3. Use a Business Credit Card for Business Purchases
Using a different payment or banking account is a good way to help keep expense tracking easy for you. This will also help cut down on having to keep individual receipts because you can just save and file your monthly statements.
4. Realistic Budget
I’m going to tell you a little secret, having a realistic budget is half the battle in having a successful home business. Having a realistic budget will let you track your marketing efforts and help you better manage your finances.
5. Prepare for the Unexpected
You need to make a habit of putting some money aside for a rainy day. You will find that unexpected expenses will always come with running a home business. Having an emergency fund will make it a lot less painful to your bottom line.
Using computer software is the best way to go for keeping your books. Using software will allow you to easily delegate your bookkeeping to someone else letting you focus on projects like marketing, creating new services and products, managing clients and finding new business.
Many times, home business owners find they are focusing on tasks that do not directly affect their profits. Many people think they have to do everything themselves but if you do everything yourself are you really improving your bottom line? Think about home much time you could save if you learned out to outsource a lot of your busy work. If bookkeeping is slowing you down, don’t just put it aside and forget about it till tax time, outsource it instead. All you need to do is send your receipts and any important information to them and they will keep your books for you.