Bookkeeping tips for small business
Bookkeeping is essential to make your business run successfully. Basic bookkeeping consists of your cash transactions, purchases, and your sales. If you cannot hire a professional bookkeeper to help you properly manage your books, you need to find a good software program to use.
QuickBooks is one of the best bookkeeping software programs to use as it provides you with the invoicing, sales tracking, and other things you need to manage your books effectively. The software you use must be simple to understand and it must have the ability to easily generate reports for your marketing department to use. Depending upon the software needs you have, quality software will cost you anywhere from $100 on up. Look for a program that also includes payroll if you do not plan to outsource payroll to another company.
Income and expenditures
One of the main functions of bookkeeping is to create a summary of income and expenditures. Keeping your incomes and expenditures in tact is essential to your business as this will allow you to see how much money you have coming in and hoe much money you have going out of your organization. Some companies still use manual ledgers to keep track of their books, but it's not always the best methods. Electronic ledgers are your best option as they can be changed easily to fix any needs that suddenly arise.
Keep a file of your receipts as you may need to access them in a few years in the event that you are audited. The receipts must be organized so you can find them in a timely manner if you are audited and you need to reference them.
Know your business size
Pick a software solution that designed around your business size. There are many software programs out there that are designed for large businesses and they will include far too much information and unnecessary things that can waste your time and money. Once your business starts to grow, it's a good idea to hire a bookkeeper to mange your books or to outsource your books to another company to manage them.
In order to make sure your books are stacking up properly you need to reconcile it with the bank once and awhile. Some accountants like to reconcile daily while others prefer weekly or monthly reconciliations. Just make sure you are watching your books and your bank account to prevent overdrafts and mistakes within your bookkeeping method. As a manager you need to do bank reconciliations to keep your bookkeeper on their toes. This is the best way to prevent fraudulent activity from occurring.
In addition to doing a bank reconciliation, you also need to keep an eye on your petty cash situation. This is another area that is prone to fraudulent activity as it is easy to access. Make sure your cash register has an electronic register you can check when you are counting the petty cash funds in order to ensure that all the money is actually there.
List your inventory
Part of bookkeeping lies in your ability to watch your inventory and your assets. You need to know exactly what you have and what it's worth. Have a checklist so you can keep an eye on the inventory levels and so you know what is going in and coming out of your office and warehouse. QuickBooks does have an inventory tracking program you can use which will help you keep an eye on your inventory. It is still important to do a count of your stock from time to time as even electronic programs can get it wrong due to human error.