Small business bookkeeping can prove to be quite a bear. Considering all of the other requirements that your business demands, the last thing you want, is work on your bookkeeping. In fact, you have probably fallen short in your bookkeeping in some ways. With a little bit of effort, you can avoid making mistakes that might be running your business into the ground.
#1: Failing to Keep Personal Expenses Separated
It is extremely important that you do not mix your personal expenses with your business expenses. Plenty of software programs allow you to scan receipts so that you do not have to keep physical copies. It helps to write what the expense was on the receipt before you scan it so that you know the exact purpose.
#2: Forgetting to Add Reimbursable Expenses in Your Bookkeeping
It is surprising how much money you can get back for reimbursable expenses. Again, keeping track of your reimbursable expenses can be easy to forget or might seem petty, but failing to do it is like throwing money in the trash. There are a lot of things that you might be surprised will actually earn your money come tax season.
#3: Improper Employee Classification in Bookkeeping Records
One of the easiest ways to accrue tax penalties is to improperly classify any employees whom you might have. Doing this can even result in a lawsuit. It is easy to forget who is a contractor or a freelancer. Just make sure that you know these things and have all of your ducks in a row before you send in all of your information.
#4: No Communication
If you hire a bookkeeper, you must thoroughly and accurately communicate your financial situation as well as any other details needed by your bookkeeper to assess and properly manage your books. I know that it can be difficult to remember everything, and some aspects could even be embarrassing to share. Your bookkeeper should ask thorough questions, however, and you should always answer them to the best of your ability.
#5: No Bookkeeping Back-Up
Even though there are a lot of apps and software programs that make it easy for you to keep a paperless office, if you are not careful, important data can be lost or misplaced. You should always make sure that your files are backed-up and current. Double-check with your bookkeeper to ensure that they have safety measures in place so that you do not risk losing important documents and information.
Do Not Hire Just Anyone
If you need some help with your bookkeeping, you should shop around for the best of the best. Settling for less can be a mistake that can cause organization problems, money loss, and even legal trouble. It is also a good idea to avoid “year-end accountants” who wait until the end of the year to get your books in order.
BlueFire Accounting is a company you can trust. They go beyond the bookkeeping basics to keep meticulous track of your finances throughout the year. You can expect clear communication on a regular basis so that you can make important decisions as issues arise.
If you need a plan before you can commit, BlueFire Accounting provides a free strategy session when you get started. That way you know where you stand and exactly what your business needs in the way of accounting so that you can make a plan at the beginning to set yourself and your business up for success.