| If you are a small businesses owner and looking to | | | | DOs- things to do right now: |
| optimize your operations, this list of do's and don'ts on | | | | Reconcile with your bank account |
| bookkeeping will help you save valuable time and | | | | Miss this practice to find glaring differences when you |
| money. | | | | finally tally your cash and bank books. This practice |
| Let's look at the DON'Ts first and rectify them now: | | | | has to be followed every month or at least every |
| Insisting to do it on your own | | | | quarter to avoid discrepancies that may prove fatal. |
| Most small business owners and start-ups make this | | | | Maintain backup |
| common mistake of maintaining the books of accounts | | | | Use web based accounting applications that take care |
| all by themselves. Unless their core expertise is | | | | of your data backup. Not only can you access the |
| accounting, most entrepreneurs procrastinate this task | | | | system from anywhere, but also the system |
| and end up with a huge backlog at the end of each | | | | automatically takes care of data backup. |
| month. The motive to do it yourself may rightly be to | | | | Generate reports |
| have control over the way finances are managed and | | | | One vital role of bookkeeping is to track our business |
| to avoid misappropriation, but remember, all these | | | | growth, but we seldom look at it that way. |
| come at the expense of deviating your focus from | | | | Bookkeeping should finally help us track our set |
| core revenue generating business activities and losing | | | | financial objectives and correct us if we are going |
| valuable time, (it is estimated that average businesses | | | | off-track. This is where financial reports come in |
| spend around 20% of their time on bookkeeping). So, | | | | handy. |
| why lose out when you have better options like hiring | | | | Use of software |
| a dedicated bookkeeper, automating, or outsourcing it. | | | | This needs no introduction; most widely used |
| All-in-one accounting | | | | accounting software QuickBooks is so efficient and |
| Most small businesses get into this habit of not | | | | reliable that it outsmarts a professional bookkeeper on |
| categorizing incomes and expenditures and end-up | | | | all counts. It saves your time, money, generates all the |
| maintaining just one book for journal entries. This will | | | | financial reports needed for tracking your growth, and |
| lead to lack of clarity as to which business activity is | | | | also comes with a plethora of features like, easy |
| turning out to be an overhead. For instance, if you are | | | | payroll system, imports your Excel reports, seamlessly |
| maintaining a separate ledger for bills receivable and | | | | integrates with your Microsoft Outlook, customer credit |
| you are regularly fighting bad debts then it shows | | | | card protection, EDI, supports Linux and much more. |
| inefficiency in your collection process. | | | | Phew...that's a lot of stuff. |
| Not recording small expenses | | | | Outsourcing |
| Many petty expenses goes unnoticed or unrecorded, | | | | This is where the buzz is around; no one needs to be |
| as we believe it makes no impact or the IRS is not | | | | educated on the unavoidable benefits of outsourcing. |
| bothered. These petty expenses over a period in time | | | | Remember most small business owners are not |
| will pile up and create a big hole when you balance | | | | professional bookkeepers and trying to be one is just |
| your accounts, these receipts if maintained may prove | | | | wasting time, money, and resources. Outsourcing |
| to be crucial while paying your taxes. | | | | makes it easier, strictly professional and above all |
| Just maintaining an Excel sheet | | | | gives you the luxury of focusing on your core business |
| Start-ups and even small businesses feed all their | | | | activities. It is always wiser to rely on expert |
| entries in an Excel workbook as it makes things easier | | | | bookkeepers rather than being unprofessional with |
| and avoids paper. But remember as your business | | | | bookkeeping. You can outsource as little as an hour of |
| grows so will this Excel sheet until it becomes an | | | | bookkeeping work per day. |
| unmanageable monster. | | | | |