Bookkeeping for Small Businesses: A Fresh Start in the New Year

Posted on January 12, 2016

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Use These Tips for Bookkeeping for Small Businesses

bookkeeping for small businessesIt’s the New Year, and you are likely making a few resolutions. Maybe you want to drop a few pounds, spend more time with your family or get into a new hobby. While you’re at it, why not get a fresh system in place at the office? Bookkeeping for small businesses is often complicated by bad habits, like tossing receipts in a shoebox for later, or, even worse, leaving them scattered between your car console and your desk drawers.

Give yourself a gift that will arrive in time for the holidays next year, by getting your records organized. There are a few steps to get started with bookkeeping for small businesses that will make the end of the year more organized and streamlined.

Decide whether you will use a cash or an accrual accounting method. If you’ve been in business a while, this decision was likely made long ago. If you’re just starting out though, you’ll need to choose between cash or accrual for your accounting method. When you use the cash method, you record the transaction when you actually receive payment, regardless of when the service was performed or the product was delivered. In the accrual method, you record the transaction when the obligation to the customer was fulfilled.

Keep your personal and business finances separate. If you are operating as an LLC, you are required by law to keep separate accounts. However, even if you are a sole proprietor, you should keep separate business accounts. It makes bookkeeping for small businesses much simpler, and it prevents you from missing expenses and overstating your income on your tax return. Consider using a company credit card, which makes it easy to track your expenses and can be a record of your transactions when you can’t find a receipt.

Consider a mobile app for invoicing and other basic bookkeeping. There are great apps for expediting the invoicing process and other simple bookkeeping tasks. Using a mobile device, you can speed up many of the processes that keep your cash flow moving and the ease of having records available anywhere, at any time.

Know when to hire a professional. If you persist with your shoebox filing system for receipts, it’s good to recognize when it’s time to outsource your bookkeeping. Hiring a bookkeeping service can be a great gift to yourself. You get the experience and expertise of a professional while avoiding paying the benefits that would come with a full-time hire. If you outsource your bookkeeping, tax preparation will get much easier. Your records will be organized and ready for accurate reporting on your tax return.

Bert Doerhoff, CPA, and the team at AccuBiz work closely with business owners, providing bookkeeping for small businesses just like yours. We offer a variety of assistance, from payroll and bookkeeping to full accounting services. Call us to set up an appointment.

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Posted in: Bookkeeping