Small Business Bookkeeping - Top 9 Tips For Success
Small business bookkeeping does not mean you get to have shortcuts in the work process. You still deal with the same books and data entries but only on a smaller scale than what you would have done in a multinational company.
Smaller scale means lesser transactions and paperwork – but not lesser work. In fact your scope of responsibility as a bookkeeper for a small business may be a lot more since you will be doing everything. In bigger companies, their budget can accommodate more manpower to deal with specific tasks. One can do the journal entry, the other inputs data in a ledger, etc.
Handling a small business bookkeeping is actually good practice for you. Since it is a requirement in becoming a certified bookkeeper that you get a 2 year work experience, joining a small business will benefit you greatly. You get to experience firsthand all the bookkeeping duties that you need to be exposed to and you are guaranteed a well balanced training.
Whether you are using downloaded bookkeeping software or a traditional hand written ledger, it all boils down to keeping a complete record of all the financial transactions of the business. This will help small businesses understand the necessary steps they need to be more profitable – by analyzing the data that you record. This is how important small business bookkeeping can be.
There are some helpful tips for you to follow to ensure that you will be doing a great job.
1. Establish a bookkeeping timeline. Set weekly or monthly dates for all reimbursements, liquidations, turn over of invoices. For instance, all invoices for the week must be given every Friday so you get to record them every Saturday.
2. Inform colleagues about the Due Dates. Keep them in the loop so they do not need to be reminded of the due dates. Everything should work smoothly from there.
3. Be consistent. Maintain a consistent format and/or heading. This will help ease the annual consolidation that you have to do when doing your annual financial report.
4. Deposit cash at once. Bank statements can be another recording of the income generated by the business.
5. Simplify. Do not exaggerate in categorizing financial transactions. For instance, office supplies can be placed in one group and fixed assets in another. Pencils, pens and ink need not be in a separate category from notebooks, paper and folders.
6. Maintain good records. Small business bookkeeping is what will keep it together. Ensure that you have a copy of every little transaction and that they are kept in a well managed journal.
7. Record on a daily basis. This is to make sure you do not miss anything and will make monthly and annual financial reports easier to make.
8. Keep a Petty cash box. Some transactions can be accommodated by the cash on hand. This should minimize bank transactions and keep them for bigger and important entries. Make sure that cash taken should be replaced by a receipt.
9. One year per box. Store all paperwork acquired throughout the year in one box. This will help make sorting and future searches easier.
Small business bookkeeping can either save or destroy a company. If you can do your job diligently, your work can help the business grow bigger or at least identify the reasons for losses.