Small Businesses and Bookkeeping: What You Need to Know

One of the most taxing parts about owning a business is dealing with your finances; you'll have to do some digging up, finding statements, recording all transactions, and doing regular bookkeeping to help keep track of your money's movement.

Financial statements can be a burden to many people; however, these tiny receipts hold crucial financial information that your business needs, especially with bookkeeping. With that, you need to ensure that you don't mix your personal and business funds to avoid confusion and mix-ups. 

To deal with this, many small business owners purchase bookkeeping services to ensure that all transactions and required financial information are recorded to avoid any issues in the long run. 

When you've realized it's time to do some bookkeeping, don't panic; we've got you covered. Below is everything you need to know about bookkeeping for small businesses. Let's begin!

1. Set a budget for taxes

Many business owners panic and get caught off guard when they see the amount they need to pay for taxes, which can often become huge and too big of an amount to pay in one go. To deal with this, it's a good idea to budget your tax and set aside money as you go along, so you don't have to deal with putting out a big chunk right away. 

By setting aside money from time to time until tax season, you'll have peace of mind knowing that you have some money saved, and you won't need to frantically look for other options. 

2. Keep things organized

Perhaps one of the essential rules of bookkeeping is to keep everything and make sure your reports, statements, and receipts are organized. 

When you neatly organize your records and know exactly where things are placed, you'll be saving valuable time for yourself and your bookkeeper. With this, bookkeeping days will be a breeze, and you won't deal with finance-related headaches when it comes to tracking and paying debts and taxes. 

3. Track your expenses and maintain records

A great way to track your expenses to use your business's credit card for all transactions. This is because you'll always receive a statement at the end of the month with your transaction history, and it will be easy for you and your bookkeeper to track and categorize your bills. 

Besides tracking your expenses, ensure that you maintain daily records. Keeping daily records will help you track your business's financial condition and spot financial issues early on so you can deal with them before they get worse. 

For small business owners, doing financial reports and tasks can be time-consuming because you'll have to deal with other departments of your business as well. For this, it's best to hire bookkeeping services to help you organize and track your expenses correctly. This way, you'll avoid any financial hiccups and hit deadlines without any worries. 

4. Stay on top of your finances

One of the things you could do to help you stay on top of your finances and retrace your transactions is by leaving an audit trail. Your bookkeeper may have a system they could do to effectively create an audit trail. With this, all your invoices will be in order, and retracing your steps won't be an issue. 

Additionally, you also need to stay on top of your account's receivables. Aside from recording the money that leaves your account, you also need to take note of the money you receive. 

Dealing with receivables is important because it can harm your cash flow. Ensure you pay attention to the deadlines of your receivables and act right away to avoid late-paying customers because the longer they take to pay, the longer it can damage your cash flow. 

Conclusion

Bookkeeping can be overwhelming to some small business owners, especially if they've never done this before. Thankfully, our steps may have provided some light to make this financial task much easier for you to manage. Besides that, consider getting bookkeeping services to help you out with this task; it could take off some weight from your shoulders, you'll be able to focus on other parts of your business, and you'll be sure that your finances are well taken care of.

If you're looking for bookkeeping services in NYC for your small business, the team at Totally Booked can help you. We streamline your business's financial side and handle all aspects of bookkeeping, from accounts payable/receivables to payroll and bank reconciliations. Learn more about services and start working with us today!