Is managing your finances becoming a pain? Are you finding it difficult, as an entrepreneur, to keep your accounting services in order? Even though it is often a tedious process to manage the finances of a business, it is extremely important. This is because staying on top of the financial information of your business helps you make more informed business decisions. In addition, maintaining your bookkeeping records helps you better comply with tax regulations and make your payments on time.
However, you don’t have to always do everything on your own. Working with a provider of professional bookkeeping services is one option.
Below, we list 6 useful tips to help entrepreneurs manage and maintain their financial records.
1. Choose the right accounting software
There are a variety of different accounting software available in the market, including QuickBooks, Xero, and Freshbooks, among others. It is worth spending some time thinking about your business and several different options before choosing the right software.
In today’s cloud-driven and interconnected world, if you haven’t already done so yet, it is also highly prudent to move your financial data from your on-premise desktop software to the cloud. Cloud-based professional bookkeeping and accounting software provides you with real-time insights on your financial data and they can be accessed anytime from anywhere as long as you have an internet connection. This ability to access your data on the fly gives entrepreneurs a large amount of flexibility. A professional provider of accounting services can help you identify and implement the right software
If you already have an online accounting and bookkeeping solution, it will be worth spending time to stack out your bookkeeping solution against similar products in the market. This can help you pick the right software for your business – one that better matches your needs. A provider of professional bookkeeping services can work with you to identify the right accounting solution for your business.
2. Separate your personal and business finances
Many entrepreneurs have had to deal with a lot of bookkeeping confusion simply because they failed to keep their business and personal finances separate. Even though tracking all expenses to a single card may seem more practical and efficient, it will always make tracking your expenses more difficult down the line.
By opening a separate credit card and bank account for your business, you can better track and measure your finances and will make sorting out your transactions every quarter or every year for tax purposes simpler.
By keeping your business and personal finances separate, you will also make finding critical information like cash flow, revenue, expenses, profit, etc. much easier. Tracking key performance indicators will also become easier.
3. Plan Ahead
The tips mentioned above should help you keep your finances in order. With your ability to monitor your finances and project future expenses and revenues, you will also be able to make better long-term business decisions. However, it is easy to see that a lack of this information would make planning ahead much more challenging.
If you are not able to make at least some amount of sense of the future performance of your business, you could get surprised with challenges and obstacles that could take the wind out of your sails. It is always good to plan for the long-term – by as much as up to ten years – to stay relevant and competitive.
4. Consider hiring the services of a professional bookkeeper
Most people don’t have the mind for numbers and are nearly not as excited or enthusiastic about dealing with them as those providing professional bookkeeping services. If you find that managing your finances is getting tedious and on your nerves, it might be time to hire the services of a professional provider of accounting services.
Although many entrepreneurs – especially those with small-scale businesses – try to handle everything on their own, the process can get tedious and challenging. This is especially true since entrepreneurs routinely handle many more activities than bookkeeping tasks alone. The details of professional bookkeeping usually are not strong points of entrepreneurs.
The reality is that, while it may seem expensive to hire the services of a professional bookkeeper, hiring one can actually save you time in the long run. Further, you will also free up time to focus on your core competencies and remain competitive and profitable.
5. Make and try to stick to a budget.
Formulating a budget helps to stay organized and effectively plan ahead. Even though considered tedious, making a budget should be part of planning ahead. Rather than be a record of how every dollar should be spent, a budget should function as a tool to make well-informed decisions. It can help with things like whether to increase the marketing spend or cutting down on overheads to maintain a steady profit.
We view budgets as good for sound financial and bookkeeping planning. It can help you steer clear of unsound financial decisions and make the necessary adjustments as and when they arise.
6. Find and work with a reputed credit union
Credit unions often provide loans at highly competitive rates to small businesses, and, for this reason, can be invaluable. As an entrepreneur, you would do well to locate the best one in your locality and explain your business needs to them. This partnership can be highly profitable and beneficial.
Credit unions also have fewer transaction fees, lower account service charges, and customized, flexible services. This can help you get access to credit to get your dream up and running.