When it comes to running a business there is almost no task that comes easy. From managing inventory to managing employees, there is a wide range of skills you need to develop in order to be successful. One of the most important skills you need to have is accurate bookkeeping. Accurate bookkeeping is one of the most vital components of any business and can give you several advantages. Not only is it useful during tax season, but it can help you save money in more ways than one. If you’re looking for advice on how to keep accurate bookkeeping, don’t worry we can help! Here are five tips to have accurate bookkeeping for your business.
- Don’t mix personal and business finances
- Choose the correct software
- File your records correctly
- Stay on top of payroll
- Have a CPA do this for you
Don’t mix personal and business finances
One of the most common problems when it comes to bookkeeping is mixing personal and business financial transactions. Doing this can not only get you in trouble with the law, but keep you from having an accurate view of your financial situation. Mixing personal and business financial transactions can lead to confusion when trying to categorize transactions. It can be a draining and exhausting process trying to sift through these transactions during tax season, especially if receipts go missing. Mixing personal transactions within your company can result in:
- Delayed accounting. You don’t know the true health of your business until you’ve sorted transactions.
- Possible lost reimbursements for business expenses.
- No peace of mind. Do you know how much money you are really making?
- General confusion. As expenses pile up the work to categorize them becomes even more stressful, time-consuming, and mistake-prone.
Choose the correct software
The best way to relieve headaches and to move on with business as usual is to have the correct sock for wear to record accurate bookkeeping. There are many types of accounting software, and we’ve talked about it extensively. However, just to reiterate, each accounting software will offer you something different. Not every piece of software is applicable to every business. You’ll need to find the one that automates most of your processes. This will help you have accurate records and save time.
File your records correctly
While accounting software can help automate your processes away, that doesn’t mean you can just set it and forget it totally. To have accurate bookkeeping you also need an accurate paper trail. This can be physical or digital. However, if you do go down the digital route, you need to make sure your files are backed up in the cloud. Some accounting software can do this, while others do not. Having a paper trail will not only keep your records straight but protect you in the event of an audit and keep your accounting on track.
Stay on top of payroll
Payroll can be one of the more complicated aspects of running a business. You’ll need to deduct taxes, track hours, take into consideration any deductions, and set up a payment schedule that works for your business. This can be overwhelming for a lot of business owners, especially whenever they experience periods of growth. If you aren’t properly ready to scale your business, adding new employees presents a lot of headaches. Not having accurate payroll can lead to a whole host of problems. If an inaccuracy with your payroll goes unchecked, you may face unforeseen problems, such as
- Being reported to the Department of Labor
- Being sued
- Fines
- Have to pay back wages
- Diminished reputation
There are software solutions for this, but most businesses will outsource this to a CPA. You can find out more about wage violations and penalties at the Department of Labor website.
Have a CPA do this for you
Do you want to know the best way to have accurate bookkeeping? It’s hiring a CPA firm to help you. They can help keep your record straight, manage your finances, and prepare you for tax season. They can also help suggest software that will improve your bookkeeping abilities as well as save you time. Even better, if you hire A CPA firm to help you during tax season the right firm will represent you in front of the IRS.
Thinking about hiring a CPA for your bookkeeping needs? At Sheffield, Trackwell, and Rapp we can do that and so much more! If you’re ready to have peace of mind about your finances, then contact us today.
