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Simple Bookkeeping Tips for Entrepreneurs!

If bookkeeping feels daunting and intimidating…. Check out these simple bookkeeping tips for entrepreneurs.  To run a strong business, you must have strong bookkeeping habits.  Without them you will likely experience cash flow troubles, and you forfeit the ability to make strategic, data-driven decisions.  But it doesn’t have to be complicated!  Follow these simple bookkeeping tips for entrepreneurs!

Keep business accounts separate from personal

If you use your personal account for business, then you will have to sort through every transaction to extract business traffic.  You risk making costly mistakes, such as missing out on tax write-offs, and having inaccurate information as you make business decisions. This can get really messy and have a negative impact on customer experience.  Instead, keep your business account separate from your personal account. You can set up a regular transfer to your personal account to pay yourself a “salary.” 

Track your Expenses

Expenses can be hard to track, and you could be missing out on tax write-offs! Choose one method to track expenses and be consistent.  It’s important that your system is easy to use or you will find it hard to maintain. Whether you use a spreadsheet, or an app, be sure to set aside some time each week to review your expenses.

Pro tip:  If you are often on the go when you incur your expenses, take a small folder with you to gather your receipts (or take a photo!), and a notebook to log your mileage!

Pro tip: A business credit card can simplify your expense tracking. When you get your statement, you can export your expenses directly to a spreadsheet!

Pro tip: Keep notes in your calendar of your client meetings, lunches, and events. That way, if you need to qualify an expense, you can quickly find the supporting details!

Track your Income

It is important to know where all of your deposits originate from.  Be sure to clearly label your deposits, differentiating between business income, loans you receive, and personal transfers.  This will prevent you from paying tax on deposits that weren’t actually revenue!  Having your business income clearly labelled will paint a clear picture of how your business is performing.

Monitor your Invoices

Be sure to have a process in place to track your unpaid invoices.  You should have a system that sends out a standard email reminder when an invoice is overdue. This can have a big impact on your cash flow, and save you tons of time!  If you find this is a recurring problem in your business, consider having clients pay up front or have them sign up for automatic payments.  

Analyze Reports regularly

Solid bookkeeping habits can not only make tax time more manageable, but it can provide great insight into the financial well-being of your business.  Checking in with these reports on a regular basis will help you see trends, and will alert you to potential problems before they arise.  If you have a large amount in overdue invoices, it may affect your ability to pay your suppliers in the following month.  Knowing this ahead of time, you can refocus your efforts on collecting payments, or reach out to your suppliers to set up a payment plan.  Either way, you will be prepared to find a solution!

Having proper bookkeeping habits in place is a critical part of running a successful business.  Follow these simple bookkeeping tips for entrepreneurs to strengthen the financial health of your business!  Need a helping  hand?  Don’t hesitate to reach out!

 

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