Why outsource bookkeeping?
As a small business owner, you are probably overwhelmed with tasks both big and small that keep you busy. It is not surprising that sometimes you can fall behind on bookkeeping. One of the areas of bookkeeping that causes the most chaos is expense tracking. It’s very easy to become overwhelmed by the sheer number of expenses involved in operating a business. So, what’s a busy business owner to do? Here’s a few tried-and-true best practices and tips to make managing expenses “manageable!”
- Keep Personal and Business Expenses Separate – Many small businesses are often launched from personal investments. However, once you are operating as a business, separating your personal and business expenses is vital. Not only will it make things easier, but it will also help you avoid missing any important details.
- Watch Cash – While you may have good records of all credit and check purchases, it is not hard to lose track of cash transactions. If your business is one that deals in cash transactions implement a policy that requires all cash transaction be documented with receipts so you don’t miss these important figures.
- Record Things Right Away – Instead of waiting and recording expenses once a week or month, recording your expenses right away is an easy way to make sure you don’t miss anything.
- Consider What’s Deductible – While you may be recording all expenses, you can save time during tax season by separating or noting your deductible expenses now. If you are not sure exactly what is deductible, there is information available directly from the IRS on their website. An easy rule of thumb is to simply keep all your personal expenses out of the business accounts. This will also assist you in analyzing the real profit potential of your business.
- Keep Track of Paperwork – Even if you record your expenses using a bookkeeping program or a spreadsheet, you don’t want to let the paperwork get away from you. You should make an effort to save receipts, travel logs, invoices and other papers. If you are moving to a paperless system, and you should be, make sure every item is scanned in and saved to file and organized before you get rid of the original.
- Think Mobile – Business owners like you are doing more work “on the go” than ever before. Because of this, you may need to record expenses while you are working from home or during travels. There are many options when it comes to bookkeeping software. Choosing a record keeping system that is mobile-friendly can be helpful if it fits with your daily routine.
- Review Data Regularly – When you are recording your expenses, you create a valuable source of data for your business. Find out where you are spending, how much you actually need to spend and where you can “trim the fat.” When you look back at your expenses, you may be surprised by what you find.
If you are struggling with managing expenses or other bookkeeping tasks, relax. You do not have to deal with it alone. Bookkeeping help is more affordable and accessible than ever before. Contact the outsourced bookkeeping experts at Virtual BeanCounters to see if we’d be a good fit for your business.