November 15, 2016
Day to day bookkeeping is of course essential, but many small and medium sized businesses find themselves getting bogged down in it, leaving them with precious little time to focus on other aspects of their business.
Should the vital elements of day to day bookkeeping become overlooked, or simply skipped due to time and other constraints, your company will quickly find itself suffering. Keeping up to date with your bookkeeping, however, will help you to maintain a healthy cash flow within your business, and allow you to pick up on trends in your financial activities, early on.
How can you keep on top of your day to day bookkeeping?
There are 3 basic sets of records that every business owner should keep, and these are:
Try to ensure that you keep a piece of paper – whether it be an invoice or a receipt – for every single purchase that you make. Should you happen to be investigated by the IRS, you’ll have everything at hand, to show them.
Legitimate business expenses may include money spent by the company, but otherwise, that money is not yours to spend on yourself and the IRS can question any money spent that isn’t associated with a valid expense.
If you’re self-employed, you can take money from your own business, but keeping a separate bank account is still the wisest thing to do to avoid mix ups and confusion over any outgoings.
It takes but a few minutes to do each month, and aside from helping you to spot fraud or errors made by your bank, it can help you to have better control over your finances, in general.
Leaving your bookkeeping tasks until the end of the day, may seem like a good idea in the morning, but when evening comes around, your brain will not be as fresh and you’ll find yourself quickly making errors which could prove costly in the long run.
Hiring a good bookkeeper would give you peace of mind and the freedom to focus on other important areas of your business, and they could potentially spot myriad ways in which you could be saving money, too. Not only that, but everything would be correctly and accurately recorded when it comes to tax preparation time.
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