Posted on: 19 September 2018
As a small business owner, you can't just rely on your bank account statements to provide you with information. You need to use an accounting program to keep track of every purchase, deposit, and invoice that you send out. Keeping accurate track of all of this information will help your business thrive and will help you when it comes to tax time.
Track Every Expense
First, you need to keep track of every expense that you pay. In order to keep track of each expense, you need to write down where you made the purchase, the amount that you paid, and what you paid for. This may require multiple entries for the same purchase.
For example, if you bought everyday office supplies, like paper, that would be an office supply expense. If at the same time, you purchased a computer for your office, you are making an investment in equipment, which is treated differently on your taxes then disposable office supplies.
Set aside an hour each week to go over and enter all of your expenses into your accounting software and to make sure that all expense are tracked and categorized correctly.
Record Each Deposit
Second, when you record a deposit, you need to make sure that you don't just put down the amount of money that you deposited into your account, but also where the deposit came from.
Did the money come from sales revenue? Did the money come from someone paying their invoice? Who paid the invoice? The more details that you can write down about each deposit, the better you will be able to keep track of where all of your money is coming for and you will be able to better track your revenue sources.
Invoices & Receivables
Finally, if your business sends out invoices, you need to keep track of all invoices. You need to mark out when an invoice is paid, and follow up with businesses if they do not pay their invoice within a set amount of time. Getting money from your invoices is an important revenue source, so you need to make sure that you track each invoice
Get Some Help
Finally, make sure that you get professional help setting up this system for your business. You don't have to hire a full-time accountant; you can hire an accountant on an as-needed business to help you get your finances in orders and set-up right. The same investment is worth it to get your finances right.
Also consider services like Deltek administration services to help with the workflow aspect of your business.Share