Bookkeeping Tips For Small Business Owners
For small businesses, bookkeeping can easily turn into the “dreaded task.” Love it or hate it, bookkeeping is an essential part of your business that requires much attention to detail and meticulous processes to avoid mistakes.
Want to ensure success in the long run? Follow these simple bookkeeping tips for small business owners to stay on top of finances at all times!
1. Make Bookkeeping a Priority
Make bookkeeping a priority for your business. At the end of the day, it is quite literally what keeps your company running.
One of the major requirements of bookkeeping is documentation – and not just at the end of the year or month. By properly documenting expenses and archiving receipts, you can avoid costly errors. Even small expenses can add up to substantial savings come tax season.
However, it is important not to make false claims when submitting deductions — tax evasion carries serious legal repercussions and should be avoided at all costs. If you’re ever unsure, we recommend asking a professional to be safe.
2. Keep Financial Data Easily Accessible
To stay ahead of the curve, it’s vital to keep your business’s records and data systems up to date. This ensures that when you need instant access to any financial information, such as cash flow and accounts, you won’t be left scrambling for answers.
Save yourself time and effort by taking advantage of app-based solutions, like Mint or Xero, to manage your receipts, track mileage and more. Accounting apps are a simple solution to readily available data that will give you peace of mind when it comes to managing finances with ease!
Be sure to have everything within reach so that critical decisions can be made quickly with all necessary facts in place.
3. Separate Business Finances from Personal Finances
Having a successful small business means adhering to a fundamental financial rule: keep company and personal finances completely separate.
Some practical bookkeeping tips for small business owners include:
- Establishing yourself as an employee on your own payroll
- Dedicating distinct accounts for your business
- Never extracting corporate funds or assets for any individual expenditures
4. Stay Informed With Tax Laws and Other Requirements
Staying on top of the constantly-changing tax landscape is no easy feat.
To maximize your business’s financial health, proactively evaluating expenses and understanding how they relate to pertinent tax legislation can be beneficial all year round. Making sure you keep detailed records of any purchases or deductions will help ensure that you are compliant with regulations while also reducing stress when it comes time for filing taxes again!
Visit the Colorado Department of Revenue website for an excellent list of resources to help you stay informed.
5. Capitalize On Unique Retirement Opportunities
For self-employed individuals, there are lucrative tax breaks that can help maximize retirement savings.
Solo 401(k)s offer a unique opportunity to deposit money before taxes while taking advantage of many similar features as employer sponsored plans.
For self-employed business owners and their spouses who work at least part-time, a Solo 401(k) can provide an ideal retirement savings option. These self employed accounts enable individuals to take advantage of beneficial tax opportunities while building meaningful income for later in life.
A SEP account is an attractive retirement savings option, as it provides benefits such as a reduced taxable income and extended contribution timeframes. Not only that, but contributions to the plan are capped at generous limits. For those looking for practical ways to save up for their golden years, investing in a SEP-IRA can be particularly advantageous.
Learn more about Solo 401(k) & SEP IRA opportunities available to small business owners here.
When it comes to planning for your future, a professional accounting firm can help you find additional retirement opportunities to best suit your specific needs. Contact Yeater & Associates to get started!
6. Schedule Regular Checkups
Stay on top of accounting with periodic reviews!
Ensure accuracy and reliability by routinely tracking all business finances, including payments, and double-checking for errors at weekly, monthly, and quarterly intervals. With regular checkups you can quickly address any discrepancies before they become an issue.
Small business owners that partner with professional accountants can work together on establishing a regular bookkeeping checkup.
7. Get Help from the Experts
If the thought of bookkeeping has your head spinning, our Greeley, Colorado team of professionals could be just what you need!
Unlock your business potential by harnessing the expertise of our experienced team. From bookkeeping tips for small business owners to accounting, we’ll equip you with tailored guidance and advice from local professionals who understand what it takes for success in small businesses.
Contact Yeater & Associates today, your business will thank you!