Top practices for improving bookkeeping at small business
Basic bookkeeping practices have remained the same from centuries but due to the influx of technological solutions and proliferation of technology in accounting industry, the methods used in bookkeeping and the role of bookkeepers have surely changed. By the look of things, we can say that we are currently living in a technology driven era where every business operation has become dependent on technology and bookkeeping is no exception. From carrying out bookkeeping on papers to collaborating with bookkeepers through cloud, many things have changed in bookkeeping.
But it doesn’t matter how much bookkeeping has changed, its importance in a business is still the same. Proper bookkeeping is the key to keeping the finance of a company at place. If a business is not able to maintain its books properly then things will spiral out of control and soon, the business will be kicked out of the neck-wrenching race of competition. For giant businesses, bookkeeping is not a big problem as they have a complete accounting department to take care of it. But the real problem with bookkeeping arises for small businesses that have limited resources.
In most of the cases, small businesses either hire one or two bookkeepers, do it on their own or simply outsource. Well, all the available options of bookkeeping for small businesses need to be checked regularly by the owner for making sure that everything is being done correctly. But if you are looking to adopt a couple of ways to improve bookkeeping at your small business then you have come to the right place. Let’s dig into some of the tips that you can use to improve bookkeeping practice at your small business.
Review, review, and review
While you may be allowed to make small mistakes in various business operations and you might get away with it but such an approach wouldn’t work in bookkeeping. Bookkeeping needs to be flawless otherwise your books will be a different story than the actual condition and situation. This is why it is very important to review everything related to your bookkeeping. From invoices to bills, everything should be rechecked in order to nullify any chances of mistakes and errors.
If you don’t have an in-house bookkeeper then outsource bookkeeping so that they review everything related to bookkeeping prior to its approval. You can also set company specific review process and guidelines so that everyone will follow the same. Flawless bookkeeping can give you impeccable results.
Always go for a phased approach
Most of the small business owners are used to sudden changes and quick adoption. Well, such an attitude and approach might work in other business operations but it will never be fruitful when it comes to bookkeeping. This is why adopting a phased approach in bookkeeping is always the best idea. Whether you are moving from a traditional bookkeeping practice to a paperless environment or adopting a new system and guideline bookkeeping, using the phased approach will be the key to a seamless change without any resistance.
You will have to streamline some processes first and then move on from there. Eventually, the whole company will be on board with the new system and guidelines. This will help the employees to adjust to the new system and guidelines in a more systematic way rather than receiving the changes as a shock.
Instead of using the traditional method of bookkeeping on pen and papers, you should move to the cloud accounting solution which is a panacea for all the bookkeeping problems. Even if you are using an accounting software by installing it on your desktop, still you are using an outdated accounting solution as we are currently living in the age of cloud. The cloud accounting solution will not only simplify your bookkeeping but it will make the overall accounting process, quick, errorless and cost-effective.
The cloud accounting solution will offer you anywhere, anytime accessibility, high uptime, enhanced collaboration, cost-effectiveness, high security and much more. You will just have to choose a good cloud hosting provider and then he will shift your accounting software from desktop their cloud server. In the modern day era, relying on age old bookkeeping practices is not the right way to move forward.
There is no denial in the fact that general ledger should always be current but it is equally important that the cloud accounting software solution that you are using offers the same interface to which your staff is used to. Like in QuickBooks, a familiar interface and features goes a long way towards solving any potential problem arising because of the shift to new technology. You will also need to make sure that there is a smaller learning curve for your employees. So, always make sure that you get the same UI after shifting to the cloud.
With such an approach, you will have the best of both the worlds; the power of cloud and the familiarity of the user interface. So, without much learning and unlearning, your staff will be able to carry on their daily bookkeeping practices seamlessly even after the shift to new technology like cloud.
Always stay ahead of tax deadline
Well, there is no denial in the fact that with proper bookkeeping, you will be able to manage the tax season effortlessly but still staying ahead of the tax deadline is very necessary. Most of the people who find tax season hectic are those who haven’t maintained their books properly, throughout the year. So, proper bookkeeping is the key to filing your taxes seamlessly. But in addition to this, you should keep the important dates like starting of the tax season, deadline and all other dates related to the tax filing in mind. This will help you to avoid penalties and you will also be able to get rid of tax filing way before everyone else.
So, if you want the finance of your small business to stay on the right track then you should always take your bookkeeping seriously. Proper bookkeeping will not only allow you to know the current financial health of your company but it will also help you in making more accurate decisions.