5 Bookkeeping Tips for Businesses

Patience and attention to detail are key to better bookkeeping. While there is no one-size-fits-all checklist, there are some standards you can adhere to which will ensure that you constantly stay on top of your finances.

1. Have a Phased Approach

If you’re in the process of moving from manual bookkeeping to a digital system, take a step-by-step approach. Rapidly shifting all at once can be overwhelming to your employees and can also discourage them. Taking baby steps ensures you are also in control of your organization as they adjust to a new system. 

2. Ensure Your General Ledger Is Up-to-date

A general ledger has all the information needed regarding a company’s financial transactions. It includes the balance sheet (equity, assets, and liabilities), and income statement accounts. General ledger accounts normally include:

• Assets like cash, accounts receivable, land, investments, and inventory.
• Liabilities like accounts payable and customer deposits. 
• Stockholder accounts like treasury stock, common stock, and retained earnings. 

3. Plan Taxes For The Year

Maintaining your business’s financial records and expenses throughout the year can ensure you are well-prepared when it’s time to file taxes. Without the usual hiccups or last-minute runs, you will be able to enter tax season confidently. 

4. Be Aware of Seasonal Trends

Seasonality is a part of any job in the world. For bookkeepers, seasonality means periods when payments come flying in through the roof, where having outstanding work can become a serious blocker. It becomes critical to anticipate these moments beforehand and to complete any backlog before the pressure period hits. 

5. Keep Your Business And Personal Expenses Separate

It might be tempting to blur the lines between personal and business expenses when you go deep into your bookkeeping process, but it’s never the best idea. Avoiding this will reduce the risk of triggering an IRS audit as it provides an accurate representation of your finances. 

Some common to keep your personal and business finances separate are

• Using a business credit card for all your business expenses
• Having separate checking accounts
• Keeping receipts for personal and business expenses separate

Source