For some of you tax season is over and for others it’s just beginning...
As a small business owner accounts can be the painful thorn in your side. You’re busy teaching, organizing your staff and scheduling clients on top of everything else. It’s easy to let doing your accounts get pushed back to a later date... And a later date...
So when you finally get around to it, there is hours of work to be done combing through receipts and finding credit card statements and so on. Urgh,
What you need is a system
Allocate a single day each month to focus on your accounts
The 5th-10th of the month is a good time to focus on numbers from the previous month.
Get your accounting system in the cloud
That way your accounts are accessible wherever you are. It also means that your data is backed up, you can pull your credit card statement directly into your accounting system, avoid time-consuming inputs and best of all, at tax time you can simply give your accountant access to all the information directly.
Track your expenses and sales
This is when things start to get tedious. If you have an accounting system that pulls in all this data automatically - that is a huge help. But you still need a system for managing those pesky receipts.
Use this mini-system for tracking expenses.
» Use 2 boxes for saving paper receipts. One to track expenses that are for the current period and the other to keep older receipts from previous periods. Once you have checked off or manually input the receipts from the current period they get put in the “big box”.
» Email receipts are slightly easier to manage because of the ability to sort by date. Use one folder per year.
Top tip! Some cloud accounting software enables you to immediately take a picture of a paper receipt and attach them to an expense which means that you don’t have to manually input. Check out expensify and shoeboxed. Both are helpful to organize and manage receipts and expenses.
Check that sales data and payments you have received match. (Be sure to allow for credit card or bank fees that are deducted before the monies hit your account). If clients pay via cash, check or card, the amounts will be deposited with different time frames. Make sure you deposit Cash and Checks at least once per week to ensure they don’t get lost and keep your bank balance as healthy as possible.
If your clients are tech-savvy and happy online shoppers then follow up with all outstanding amounts owed to you (accounts receivable) with a link to online payment. Staying on top of your invoices and amounts owed will avoid big headaches at the end of the year.
Get daily text messages or email with your current bank balance. A little daily reminder of where you stand in black and white is the neatest way to nudge you towards staying on top of your numbers.