Tip # 1 – Learn the basics of bookkeeping – even if you do not plan to be the bookkeeper! You may have delegated the task of bookkeeping to an employee or business partner, but that doesn’t mean that the bases will always be covered. In cases of emergency, illness, etc., it is important that you know the basics in case you must take over the responsibility.
Tip # 2 – Establish a petty cash fund. This is a great tip to avoid issues with minor and unexpected expenses the creep up. Usually these expenses are so small that it is not worth writing a cheque or using the store credit card – such as buying staples or cleaning supplies. Document receipts for all purchases made with the fund, and replenish when needed. Make sure to do routine “surprise” counting to ensure that the amounts add up on both ends.
Tip # 3 – Keep it simple. Make your record keeping methods as simple as you can. Use the early years of your business as a learning process and build up your accounting methods slowly. Rushing into anything complicated can sometimes be a recipe for disaste, and diving into something you do not fully understand is simply overwhelming.
Tip # 4 – Use two methods both paper and electronic bookkeeping – continuing to book keep on paper might not sound worthwhile – but trust us, it really is! To many people, electronic bookkeeping can easily become a confusing mess of unbalance numbers that make no sense! Keeping records on paper always feels more hands on, and in many cases it is easier to find where you may have gone wrong. If you prefer to work on the computer, be sure to keep printed copies of important documents in case of emergencies.
Tip # 5 – Prepare and monitor budgets and profits. Creating (and sticking to) a budget will always help keep expenses in line, and allow you to see actual results reflecting planned ones. This will help guide your expenses and keep your profits up!
Tip # 6 – Prepare and review monthly bank reconciliations. Business owners should always know both their monthly and even daily account balances. If you are not doing them yourself (which you do not have to), take time to occasionally check and make sure that they are being done.
Tip # 7 – Review quarterly and monthly tax reports. It is dire that small business owners always maintain payments of their taxes. non-payment fines and penalties can destroy a small business in no time flat. Always make time to ensure that all returns have been paid and filed properly and as soon as possible.
Tip # 8 – Maintain separate personal and business bank accounts. Sure, this business might be your baby and maybe you poured all the money you have to get it started so long (or not so long) ago, but it is important to maintain a boundary when money is involved.
Tip # 9 – Bill promptly and accurately. When you always bills on time and for the correct amount, your customers will tend to follow suit and work within the same system – meaning less unpaid invoices and more money in the bank.
Tip # 10 – Find an accountant to work with you! When in doubt, an accountant can be entrusted to work with you and help you meet all of your financial goals.