Many new, small business owners don’t realize how important it is to give bookkeeping ample attention. Bookkeeping is something that needs to be done, and done well, to ensure your business can thrive. It is vital that you have clean books so that you know exactly where your company stands financially. To have clean books, they need to be accurate, up to date, and organized. Propel Your Accounting is here to share tips to help you keep your books clean.
How to Have “Clean Books”
There are several things that business owners can do to ensure their books are clean.
– Reconcile Accounts: There are bank accounts and credit accounts that need to be reconciled regularly so that you know where you stand financially. You don’t want to get caught overstating or understanding how much you have in your accountings.
– Adjust: If you find that you have inaccuracies in your books, it is time to make those adjustments. You may have stale items including uncollectible receivables or uncleared checks that need to be dealt with.
– Separate Business & Personal Finances: When you have your personal and business finances together, the waters can get muddy. For tax purposes, it is vital that you have your personal finances and your business finances completely separate from one another.
– Keep Receipts: As you make purchases and have business expenses, it is important to the organization of your books that you keep the receipts. When taxes roll around, you will be able to more easily deduct all of these expenses and lower your taxable income.
– Verify Inventory: You need to know what your inventory looks like. That way, you aren’t claiming assets that don’t exist. When you’re verifying inventory, you will ensure the balance sheet is accurate as these discrepancies show up on a balance sheet later.
– Payments to Contractors & Employees: Small business as well as larger, more established businesses often have employees or will occasionally hire contractors to work for them. Make sure if you do this, that you have recorded payment to them. These payments are all a deductible expense you don’t want to miss.
– Close Your Books: At the end of the year, you need to be closing your books. This gives you the final numbers for the year. These numbers will be important as you move into tax season and for other financial purposes. Make sure closing the books doesn’t happen until all of the accounting adjustments have been made.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are a business owner and bookkeeping is something you struggle with, you can turn to Propel Your Accounting to give you the help you need. We will handle your bookkeeping as well as other accounting needs so that you can focus on other aspects of growing your business. Let us partner with you as we work to help you reach your business goals. Call us today!
