10 hacks To Effective Bookkeeping For Small Businesses

Most of the small businesses circumvent the boring process of bookkeeping because it is not as exhilarating and gripping as sales and marketing but still it plays a key role in business success.

According to a Canadian survey that was released in November 2019, the operating revenue of bookkeeping services rose by 4.6% in 2018. Moreover,  bookkeeping is ranked # 20 in best business jobs.

For a small business owner, it is pretty much a solo performance where one person has to keep everything in check be it marketing, sales, accounts or say every aspect of the business. It is very important to keep your financials in order so that your business flourishes smoothly. If you are stressed due to dispersed invoices and receipts, the good news is that the entire process of bookkeeping can be handled easily just by using the right hacks.

1. Utilize digital support – opt for the latest bookkeeping software:

Save time and increase your productivity by transforming the tedious and exhausting job of manual data entry into an automated procedure by using modern bookkeeping software.

Small businesses should take advantage of reliable applications to ensure seamless access to payment options by combining accounting and digital invoicing. In addition to this, automation aids businesses to keep their accounts receivable on top, eliminate human errors and set reminders to stay alert regarding the deadlines.

There are certain software available on the cloud such as Xero or QuickBooks with a wide range of automation. They are not complicated, but you should recognize some tips on using Quickbooks and get started by just providing data about your transactions and it will compile and compute all the processes for you.

2. Open a bank account exclusively for business:

The most essential hack to keep your records clear and accurate is to have your personal and financial accounts completely separate. In this way, it would become very easy for you to keep an eye on the finances, income, transactions and overall performance of the business.

It is not obligatory for small business owners but it is an ideal situation to have a business-only checking and savings account which will lead to getting a business credit card and building up your credit score.

3. Link-up bank accounts and credit cards:

It is very convenient for small businesses to manage bill payments with the use of modern accounting software especially when there are multiple accounts and credit cards to handle. Checkout best accounting software for small and medium-sized businesses. Go for smart bookkeeping and automate your transactions to ensure smooth, hassle-free and on-time payments and billings to your clients.

4. Keep a record of everything:

Mostly small businesses fail to maintain the records, the invoices and receipts are never found to be in a place that makes them puzzled when they try to find what exactly the expense was for.

Be a smart business person and keep track of all your expenses by choosing a genuine software/application that will store all your receipts immediately and even categorize the payments for your just by one click. Have a detailed insight on how can accounting records be kept electronically.

5. Categorize your expenses:

It is necessary to categorize all the expenses by modern bookkeeping systems. Select software that allows you to make categories so that every expense record goes directly to the assigned category just by one mouse click. Keep in mind the categories should be as per your tax authority’s requirements. This will enable you to know where and how much you have spent.

6. Calculate your taxes:

Taxes can be quite a torturous matter for any small business owner if you are not prepared ahead of time. The trick to avoiding this pain is to know your taxes beforehand according to your location and type of business and then efficiently determine the tax as soon as the sale is finalized. Compliance with tax is directly proportional to the reliability of your business.

7. Reconciliation every week:

Although gathering all the data and comparing accounts payable and receivable is an intimidating job but it affects your business significantly. Luckily, reconciliation is now quite straightforward due to modern accounting applications. Get in the habit of organizing your book-work weekly, this will help you in the long run and save you from trouble at the end of the financial year.

If you want to spare yourself from shuffling through piles of papers it is best to hire a bookkeeper but before making any decision evaluate in-house bookkeeping v/s outsourced bookkeeping service, which one is best suited for your business?

8. Have a dedicated workplace:

Small businesses are often run from home. The workstation must be completely separated from the rest of the house. This will allow you to not only focus properly but also keeping all the documents safe and arranged which will eventually make you easy on your mind. If all your documents online make sure they are all in one dedicated work folder.

9. Save on Cloud:

Nowadays cloud-based apps and accounting software are the best bets to ensure increased business productivity by improving functionality and accessibility. Other benefits of getting your business on the cloud are:

• Security
• Zero risks of losing data
• 24/7 accessibility from anywhere in the world
• Cost-effective and affordable
• Subscription-based pricing and zero cancellation fee
• Connects all team members on one point
• Updates on a real-time basis – no waiting

10. Outsourcing:

There is a chance that the process of bookkeeping can make you feel anxious and under constant pressure because it requires a particular set of skills and expertise to manage the books. So, make your life easy and hire a professional to take care of the nitty-gritty for you. Investing in a competent professional and expert bookkeeper can boost up the productivity of your business.

Hire an expert bookkeeper:

At Centrosome, we are confident about the services we provide and will not shy away from giving you references. Besides, we will be happy to tell you why we are the top name in accounting and bookkeeping. We have been in the industry for many years and have several happy clients.

If you’re looking for an accounting and bookkeeping company, here are a few reasons why you should choose Centrosome. As a bookkeeping and accounting company, based in Ottawa, Ontario, we ensure that we exceed expectations and always put you first. Our services are geared towards small businesses and include bookkeeping/accounting, consulting IT, and tax preparation.

We offer our services across Ottawa, Kanata, Nepean, Orleans, Rockland, Limoges, Casselman, Embrun, St. Albert, Kemptville, Arnprior, Ontario, and Gatineau, Quebec. We also provide Virtual services across Canada and the US.

Conclusion

Bookkeeping is an absolute process of managing your accounts, which cannot be learnt overnight but step-by-step with time throughout the life of your business. This long journey can be eased by using the right hacks. For professional assistance choose Centrosome Inc.

To learn more about the services we offer at Centrosome, please click here. To read what our clients are saying about us, please click here. If you have any questions about how we can help you, contact us.