It is easy to understand why some new business owners would initially want to do their own bookkeeping or accounting. First, doing either of the tasks by themselves costs zero dollars on their part. Second, it allows them to personally see how their ventures’ financial health is doing.
Although the thought might seem very exciting at the beginning, everything can easily go south from there. It can overwhelm and confuse you especially if you never had any previous experience in the bookkeeping or accounting area. This is understandable and in no way a reason for you to just give up. The fact that you are reading this is already a sign that you are willing to improve, and know that you will.
On the other hand, if it is too overwhelming for you at the moment, there is also no reason to not ask for help. There are many Boston CPA firms out there that are willing to help you with whatever bookkeeping or accounting problems you may be experiencing, and one of them you can actually find on this site: https://www.tristancpa.com/boston-accounting-firm.
If you are determined to go ahead and do the bookkeeping job by yourself, here are some simple accounting tips that will help you get through the job successfully:
- Open a separate account for your business – The first thing that you should do when operating a business is opening a separate account solely for your business transactions. This makes it a ton easier for you when looking through all your business transactions because you will only have to look at one account.
On the other hand, using your personal bank account for business transactions just makes things more complicated. Imagine sifting through all your shopping trips and other personal expenses while looking for all business-related transactions. With that being said, do yourself a favor by opening a separate account now. Your business will thank you for it.
Keep an accurate book by listing all your transactions timely – Managing your business can be hectic, but it is important that you list all of your transactions in your book as soon as possible. For example, charity donations should have receipts and they should be entered into your book to qualify for a tax refund. Other transactions, expenses, or income should also be listed within the month they were incurred to have a clear idea of your business’ financial situation.
Keeping track of your expenses and receivables will also be helpful for you as it allows you to easily check your cash flow. You will know which expenses are depleting your funds, which clients are late on payments, and many others. Knowing these things allows you to rectify the situation and improve your business’ financial health.
- Learn to make an error-free invoice – Invoice is the best friend of any business that provides products or services. This is how they collect their fees and get paid accordingly, so make sure that you know how to make one properly. There are many invoice-making apps available for free. Try using them and make sure that when you fill it up, it is concise and error-free. Don’t make multiple copies of it as well.
Once you have sent in your invoice, make sure that you do not make changes to it as it can confuse you or your client. If you have forgotten other items, just make a new one or just add it to your next invoice. And, of course, immediately enter it to your books so you are aware of your cash flow.
- Make a budget – If you are just starting your business, chances are you are a little low on cash. To amend that, try making a budget and stick to it. Allot money for the important expenses first, like bills and payment for suppliers, and give less priority for things that you can do without, like budget for staff lunch or coffee maker in the office.
- Know the tax laws – Tax laws are complicated and they change often, too. To save on tax payments, it would be beneficial for you if you know the tax laws that apply to you. If there are tax exemptions that apply to you and your business, know what the requirements are, which is synonymous to less tax for you to pay and more money for you to save.
Bookkeeping is a job that you can either do by yourself or by hiring a skilled professional. If you do it by yourself, the best way to do it is to read up and gain more knowledge on the said matter. If it gets way too overwhelming for you, you can always avail the services of a Boston CPA firm of your choice to help you out with your business finances.