If you run a business, you may feel like you’re constantly trying to juggle several tasks at the same time. Bookkeeping may not always be a priority, but it’s so important not to underestimate the difference efficient accounting can make. You may be busy trying to launch a new product or step up your marketing campaign, but the moment you take your eye off the numbers, you put the future of your business at risk. Success boils down to making profits, and if you’re not diligent with bookkeeping, this can become a very tricky target to hit. If you’re a business owner keen to take control of your books, here are six golden rules to follow.
Do not mix personal and business finances
If you’re an entrepreneur and you have your own business, one of the most important rules to comply with is keeping your personal and business finances separate. Don’t try and handle every payment you make for your company and your household from the same account, and don’t dip into business funds for your own pleasure or vice versa. Use your personal account for your individual expenses and business accounts for everything related to your company. You may find it beneficial to open multiple accounts for your business and use them for different purposes, for example, overseeing the payroll and paying suppliers.
Take note of every single payment
When you’re rushing around trying to get a business off the ground or develop a growing venture, it can be very easy to forget to log a payment or file an invoice. It’s essential to keep a record of every single payment you make and receive. Your books need to be accurate. If you find it difficult to keep physical records and files in order, consider investing in software that is designed to make bookkeeping easy and hassle-free.
Make sure you’re aware of rules and regulations and seek expert advice
When you establish a business, there are all kinds of laws and regulations you must adhere to, including financial legislation. You should be aware of how to manage your books and make payments in the right way. It’s critical to understand the way the tax system works and to ensure you pay what you owe by the specified deadline, for example. If you don’t have the first idea about taxable income, expenses or deadlines, it’s wise to seek expert advice.
Backup your records
We all rely on technology these days. There’s no doubt that it makes life a lot easier, but systems don’t always run smoothly. Technical hitches happen, and modern businesses also have to contend with the threat of cybercrime. This is why it’s so important to ensure you back up your financial records, and you have access to more than one copy of your accounts.
Make use of technology
Technology has replaced several manual business tasks. Many businesses now use software or online programmes and apps to manage their books, rather than sitting down with a pen and paper and inputting individual expenses or payments. If you’re short on time, you don’t have a lot of experience in bookkeeping, and you’re looking for a simple, stress-free way to get the job done, consider taking advantage of the latest technology on offer. For many business owners, bookkeeping is one of those time-consuming tasks that detract from the core elements of day to day management, so finding a hassle-free system can bring multiple benefits. You have more time to focus on running your venture, and you’ll have access to accurate, up to date accounts at the touch of a button.
Even if your books look healthy now, you never really know what’s around the corner. A major PR gaffe, a crash in the local or national economy or a dramatic decrease in sales could all put pay to years of hard work and investment. As the world of business changes constantly, it’s wise to plan ahead. Keep an eye on your cash flow, try and put money aside and set up a rainy day fund, and don’t try and run before you can walk. If you have a seasonal business, it’s particularly important to think ahead so that you can cover quieter months.
Running a business often involves juggling several tasks at the same time. Sadly, bookkeeping is often one of those that falls by the wayside. If you’re a business owner, you need to keep your eye on the proverbial ball and make sure you’re aware of everything that is going on in your accounts. Hopefully, these golden rules will help to ensure that your business books are in good shape.