If you are a new small business owner and struggled with keeping your expenses and accountings straight last year, here are three tips for getting things together and on a better track this year.
#1 Have A Separate Payment Method For Business Expenses
The first thing that you need to do is make sure that you have a payment method for business expenses that is separate from your payment method for personal expenses. What you spend and make can quickly get muddled when you use the same account for personal and business expenses.
You should have a second debt or credit card that you use solely for the purpose of your business. If you are going to the store and need to buy both personal and business items, ask the cashier to ring up the items separately. It may take you a few more minutes at the checkout but it will save you in the long run as you can look at your credit or debit card statement and easily see all your business expenses in one place.
#2 Keep A Running List Of Expenses
Second, you should keep a running list of expenses. Carry a notebook around with you or use a notetaking app to jot down each business purchase you make every week. This will help you keep track of what you purchase and why you purchase it for your business.
At the end of every week, make an appointment with yourself to transfer the information in your notes into your accounting software. Make sure that you write down your expenses, date of purchase, what you purchased, and why you purchased it. You should also scan or make copies of all receipts. Keeping a running list will make this task go by faster during your weekly bookkeeping appointment.
#3 Develop A Solid System Of Invoicing
As a small business owner, it is vitally important that you keep track of your invoices and make sure that they get paid in a timely manner. Purchase some accounting software that will allow you keep track of every invoice that you send to a customer.
Once a week, perhaps at the beginning of the week, review all outstanding invoices and spend fifteen minutes to a half hour re-issuing invoices that have not been paid and reaching out to customers with outstanding balances. Invoices are your business's way of staying afloat, so this is a great weekly time investment.
If you need help getting your business's finances in order, work with a local accounting firm.