Bookkeeping Tips For Small Businesses

Posted on: 7 January 2019

The primary reason why people open businesses is to make a profit. Before obtaining any profit, the firm incurs various expenses such as power costs, salaries and miscellaneous expenses. It is only after deducting these expenses and paying off any debts that the business person realises a profit. Bookkeeping refers to the business task of recording financial transactions. It is one of the core functions of an accountant. If you have a small enterprise that may not afford to hire an accountant, you need to conduct bookkeeping by yourself. Below are a few tips to help you.

Make bookkeeping culture

Your books should be updated on a daily basis. If you do not update them, chances are that you will forget some of the expenses incurred. Learn to keep your receipts. These are important if you need to go over your records.

Don't mix business expenses and personal expenses

One mistake that small business owners make is mixing their personal expenses and business expenses. If you fall into this trap, you will not be in a position to balance your books. To overcome this, have a business account and a personal account. If the business is your sole means of livelihood, then you should employ yourself. Pay yourself a standard amount at the end of every week or month. In such a way, you avoid having to take money from the business account.

Automate accounts 

Take advantage of modern technology by automating your business accounts. Modern software such as point-of-sale software can go a long way in helping you manage your numbers. The software will record the sales, make an inventory and generate various financial reports.  

Get professional help 

On a regular basis, ask an accountant to go through your books. The accountant will quickly identify and correct any errors occurring in your books. Besides, he or she can help you forecast business, calculate business risk and file your taxes. Learn from the accountant to improve your bookkeeping skills.

Plan for your profits

As a business person, you must be visionary. Plan to grow your business by reinvesting your profits into the business. Small investments aimed at increasing your stock or even expanding your business space can go a long way in growing your profits. 

Small business owners aiming to improve their bookkeeping skills should make bookkeeping a culture, avoid mixing personal and business expenses, automate accounts, seek professional help and plan for their profits.

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