Bookkeeping Habits For Entrepreneurs
"Good bookkeeping is essential to keep your business thriving—not just surviving."
1. Get Professional help to prepare tax returns
If you’re like many entrepreneurs, you likely went into business to pursue a passion, not to become an accountant.That’s why it makes sense to outsource work you don’t have the expertise or time to do.
Professional accountants can do more than just ensure your returns pass muster. A trained financial eye can spot ways that your bookkeeping processes—and perhaps your business itself—can be improved.
2.Don't go entirely "hands-off"
No matter your level of accounting expertise, it is beneficial to your business for you to understand as owner some of the basic business numbers, including profit, trend in expenses, accounts receivable, profit per customer, and how your client funnel works.
3.Get the right software
There are many different options out there, so look for a system that best meets your business needs—and one that you’ll actually use. If you’re not an accountant by training, then avoid systems that require a telephone book sized manual to get started.
4.Document your processes
This way things are done the way you want it, and ultimately there are less room for error.This can also rule out confusion and answer questions before it's asked.
5.Keep expense receipts
You can’t know how much you’re spending on your business if you don’t keep receipts. This is somewhat straightforward for credit card purchases, since you’ll have both receipts and monthly statements against which to check them.
Where things can get tricky is if you aren’t careful with cash expenses. These receipts matter even more since there are no backup statements. Some people keep a small notebook with them to log cash expenses as they’re incurred.
6.Track your receivables
It’s one thing to issue invoices, but it’s another to ensure your invoices are paid. Keep up-to-date logs of your invoices and the status of each—sent, received, paid, partially paid, and late. Some accounting solutions can even keep track of invoices and flag late and unpaid invoices automatically.
7.Ask your accountant how you can work as a team
Business owners often look at their accountants as just another expense, and only visit during tax crunch time. A trusted accountant, however, can be a key ally in your business, helping to guide its path to success, shaping it to provide better returns, and helping spot potential issues in the business before they arise.
Entrepreneurs should approach their accountants as business partners, not just tax prep, and find someone who can offer insight into the business. A great accountant can help take a business to the next level.
An accountant, Walter Diemer, invented Bubble Gum in 1928. It was bright pink in colour because that was the only dye he had to hand at the time.