A successful business requires more than just a great product or service. Entrepreneurs must know how to grow their businesses in a smart way while managing finances. Someday you might hire an in-house accountant, but in the meantime, here are the most important steps for you to take to ensure orderly bookkeeping for the business.
Select Effective Software
Often the easiest route to better financial organization lies in the appropriate software program for each of your business needs. There are hundreds of choices out there. Most are cloud-based, which means users have access to secure financial data from anywhere there’s an Internet connection. All systems help with financial organization. Some help with invoicing, some track receipts, others keep track of and issue payments, and some platforms do it all. Some options for online accounting software, like Sage One, offer several tiered levels for various bookkeeping needs.
Accounting software comes in a variety of prices from free to monthly fees of $100 or more depending on features. Take the time to select one that not only fits the current business but future growth as well.
Record Each Event
It’s tempting to new business owners to put off doing the books until there’s “more time” or until just before taxes are due, but ignoring your physical or virtual ledger makes for a larger headache later. Record expenses as they happen. There’s no reason to try to piece together a puzzle with a deadline looming.
Keeping every receipt and transaction is preferable over tossing something that might be needed. Create a folder system that details business expenses. Scan the paper copies into the computer using a scanner or a handy smartphone app, log them on a spreadsheet on the computer, or use software that tracks all your financial data. Not only will software keep everything organized, it will also provide greater insight into expenditures.
Reconcile Your Bank Accounts
Always keep an eye on the account. Monitor it for fraudulent activity and ensure each deposited check gets credited to the account. If the bank provides access to your transactions electronically, paper copies aren’t necessary, but many people feel more secure with hard copies.
Secure the Important Information
Valuable business papers belong in a fireproof safe. Back up (and protect) valuable data to the cloud or an external hard drive. Safeguard business information from damage or from situations that might render it otherwise unrecoverable.
Track Your Receivables
Invoicing is essential to the success of any business. Tracking the business’s receivables is just as important. To follow up on late or unpaid invoices, you’ll need to put in place a reliable tracking system. Some accounting software programs perform this function automatically, but if payment comes via check, enter that information as soon as you receive and deposit it.
Financials are one of the most important aspects of your business. Creating good habits early on can save a lot of headache and financial problems in the future. Use the resources at your disposal to streamline as many of your financial processes as possible.