Bookkeeping Management 101: How to Keep Your Books in Order When Running a Business

OlufisayoSeptember 26, 20180945 views

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If you’ve ever found yourself starting a business or wanting to optimize your business processes, you’re going to need to look at your procedures from the ground up.

For instance, if you’re looking into developing better ways of checking your finances, you might want to know how to do your bookkeeping essentials properly. This is especially since this plays a huge role into making sure your business runs smoothly and without any form of complications throughout its lifetime.

This article will help you learn how to keep your books in order when running a business. The tips below from Balancing Books Bookkeeping will likely be able to enable you to formulate better ways of managing your accounts to stay free and clear of complications.

If you’re the one running your business and you want to keep your books in tip top shape, you might think this can be overwhelming. You’re not entirely alone. In fact, 40-percent of business owners say bookkeeping and taxes are some of the worst parts in running a business, and 33-percent of owners actually spend most of their money on financial tech solutions such as bill payment, bookkeeping, and accounting.

Interestingly, it appears a lot of companies are already shifting their bookkeeping needs into the cloud – but that doesn’t mean your knowledge on getting your books right is useless. In fact, it’s now more than ever that you need to have good accounting knowledge on keeping your books in order, as you should at least be aware of what both software and manual entry can do to your numbers when done both correctly and incorrectly.

Bookkeeping Management: What You Need To Know

Bookkeeping isn’t the easiest thing to do in the world, as it takes more than just “balancing your accounts” to make sure everything is in order. Understanding at least the important elements that comprise proper bookkeeping allows you to be in a position of advantage, as you’re now aware that even the tiniest factors can make a big difference when it comes to evaluating and assessing your business’ financial performance. Here’s other ways to keep your books in order when running a business:

Keep your receipts within a secure system: You need to be able to start doing the tradition of keeping your receipts, both from your purchases and your sales. Your receipt, to recap, is a kind of record that has the date, the amount, and other relevant information that will be important to both you and your customer regarding a sale. This essentially allows you to in turn make summaries of all your transactions in the future. Depending on the kind of business you have, these can range from simple slips in a box to a filing system connected to all your cash registers. This basically means you need to create a system that’s apt for your needs, depending on the kind of business you are. For instance, the more expenditures and sales you make the better, and secure your filing system must be in order to properly file your transactions.

Set up your ledgers properly to prepare them for posting: A lot of people tend to complicate the nature of ledgers, but you have a “ledger” if you have a complete list of all your expenditures, revenues, and all things you want to keep track of based on your receipts. These are normally categorized by date, categories, and other important segregating factors. You can then use information in your ledger to answer relevant financial queries on your business such as how much you’re making and losing. What actually makes ledgers a bit overwhelming is depending on how detailed you want the information on your ledger to be – as your decision here will determine the kind of setup you have to make for your ledgers.

Post regularly and according to your standards: When you “post” to your ledger, this simply means transferring information from your receipts for purchases and sales onto your ledger. The frequency of you doing this really depends on how much you spend and make, and how detailed you want your ledger to be. Normally, the more sales you make, the more frequent you should post to keep everything up to date. For instance, a store that sells or buys thousands of dollars every day should post every day in order to be safe. It allows you to not fall behind the information wagon and that you’re always prepared to follow-through with the paperwork you need to make. This is why a lot of owners and accountants don’t leave the store without properly assessing all transactions.

Learn how to create basic financial reports: Another important aspect of bookkeeping is to actually know how to create the proper reports for your business. This can be tricky, given you need to actually assess and consult legal and financial authorities to know what kind of reports you need to submit every few months. However, aside from these essentials, creating financial reports are important as they determine whether you turned profits or lost money on a certain period of time, or to provide information such as if customers are giving enough money fast enough for you to keep up with your bills. Reports allow you to combine your ledgers’ data and create an accurate look into your business’ performance so far.

Use accounting software to speed up, make processes more efficient: Don’t hesitate to use accounting software to speed up the process, as a lot of programs can actually create its ledgers for you as you input information. In fact, some even create the necessary reports based on the information you provide them. Aside from learning how to actually do everything by hand, it’s important you know just what information to place where, and what sort of reports your software is creating. This essentially speeds up your bookkeeping process, and leaves room in your head for processing and accurate reporting.

Train under a professional for applying new trends, discovering new strategies: You should also consider training under a professional in order to not just learn better ways of keeping your books up to date, but to make sure you’re aware of particular strategies or specific requirements that you may not have been aware of. It’s important you get the insight of a professional about your strategies and bookkeeping methods in order for you to find better ways of managing your books and making your record keeping process much easier to digest and process.

The Bottomline: Bookkeeping Essentials For Your Business Needs

Running a business is no easy feat, especially if you’re in charge of your books. After all, accounting for your business takes into account more than just your sales and how much you’ve spent. If the above are any consideration, then you also have to be able to take into account things such as taxes, debt, and other factors that may affect the overall financial status of your company.

Understanding how these elements work and blend together can give you not just the means to properly report the status of your finances. Rather, it can actually give you a clear enough view of what’s happening to your company to make the proper financial and business changes to ensure your success.

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