Statistics show that the accounting industry in America is worth approximately $110 billion.
Despite the fact that anyone can do their own books, the professional accounting industry continues to boom. Small business bookkeeping is relatively straightforward when you know what to do, but mistakes are extremely costly.
If you want to do your own books for your small business, there are a few things you should be familiar with. We’ve looked at five of the most important bookkeeping tips in this article.
- Track Everything
Bookkeeping, regardless of the size of the business, is essentially just keeping track of cash flows. If you stay on top of it at all times, it makes everything relatively easy. However, if you let things slip too frequently, you’re going to cause yourself major headaches.
Set aside time each day or each week to record all your transactions. That will decrease the likelihood of your losing track of things.
- Categorize Everything Carefully
Keeping everything in its place is a huge part of bookkeeping. Everyone knows the difference between an expense and a gain; however, there are subtler distinctions between cash flows you’ll need to be aware of too.
This is particularly important when it comes to listing your business expenses at tax time. Certain expenses are eligible for tax discounts, while others are not.
- Keep Copies of Your Records
This is less of a task nowadays than it was years ago. With technology, there’s no excuse not to have everything backed up.
However, a lot of people still lose data because of a failure to keep copies. You should keep both hard and soft copies of all important data; use cloud software as well as a memory stick or similar device.
- Use the Right Software
Following on from the previous point, technology has revolutionized the way we maintain our books. Instead of writing everything by hand in dusty volumes, we can just tap a few keys on our laptops to achieve the same results.
To this end, make sure you invest in reliable, user-friendly accounting software.
- Look for Help if You Need It
There’s no shame in turning to a friend or colleague for help if you really need it. Anything is better than making a major mistake in your accounts and having the IRS audit or fine you.
You can also outsource your bookkeeping work if it’s becoming too much for you to handle. This bookkeeping company provides a great service at a reasonable price.
Small Business Bookkeeping in 2020
Small business bookkeeping brings its own set of challenges, no matter how familiar you are with the financials of your enterprise. However, with the wealth of information and accounting technology around today, there’s no reason you can’t become proficient enough at it to file your own returns.
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