Bookkeeping Tips for Your Small Business
As a small business owner, it's your responsibility to handle obligations related to money when it comes to your company. Entrepreneurs are lucky in a sense that they have a certain sense of control over their career, but it can be a double-edged sword. While you can manage a majority of aspects of your job, it's also important for you to fulfill responsibilities, such as bookkeeping, to stay afloat.
Bookkeeping can be boiled down to crunching the numbers for your beading business on a regular basis in order to maintain your bottom line. Although it may seem like doing some simple math on a calculator, you will quickly find that there's more to it than just jotting down a few numbers.
As you establish a strong client base and hire employees, bookkeeping can become a daunting task. It might be best to consider hiring a professional accountant later down the line to stay on top of your bookkeeping responsibilities. However, you may not have the money to do so early on in your beading business. If this is the case, Entrepreneur.com says that there are a few steps you can take to make bookkeeping a little easier on yourself along the way.
||1. Keep track of all of your deposits. Many entrepreneurs are quick to focus on the amount of money coming in, but minding the numbers when it comes to deposits is important as well. This means keeping track of money that you need to deposit in order to take care of various expenses.
There are a number of different computer programs that can make it easier for you to do so, one of the most popular ones being Microsoft Excel. Using spreadsheets for the first time can be intimidating, but when it comes down to it, all it involves is applying simple formulas to boxes on a screen. The program can do the actual math for you, which may come as a relief if you aren't exactly number-savvy. Keeping track of your deposits can also make it easier to do your taxes once the season rolls around.
2. Stay on top of all of your expenses. This is especially crucial if you intend on making sure that all of your taxes are properly paid. Keeping track of your expenses can also help you hone in on where you might be spending too much money and areas where you could be putting more cash toward savings.
It may be easy to keep track of your general expenses at first: your computer, supplies and products, and a website domain. However, these costs are bound to expand over time. Factor in employees that you hire, the amount of money rent for a storefront and distribution expenses, and you might find a harder time bookkeeping than you originally thought.
Keeping track of every expense also allows you to make deductions when it comes time to file your taxes. For instance, you may be able to get a return on the amount of money that you spend on internet to work from home on a regular basis. However, it's important for you to be able to go back through your documents and retrieve a solid number as to how much you spend on internet on an annual basis.
3. Save all of your invoices. Just as you would save a receipt after you make a big expense at the grocery store, it's important for you to save the invoices for your small business. Even if it's just for mailing purposes of supplies, every small expense will count toward your overall bottom line and financial stability.
It's especially important to keep track of invoices that come from clients, distributors and any manufacturers you may be working with. Not only will this help you during tax season, but it will make sure that you're paying the people you work with fairly on a regular basis.
4. Plan ahead for large expenses. When bookkeeping, it's important to stick to your calculations and the solid numbers. However, it doesn't hurt to do a little planning along the way. This means expecting expenses that you may not be able to predict, such as emergencies, natural disasters or a sluggish economy. Although it may seem like an unnecessary precautionary measure, you'll be happier you did it in the end.
If you want to go the extra mile, open a bank account and dedicate it to the emergency expenses. Put a little money away each month to start building funds that can be used for unexpected situations later down the road. When it comes time to use it, you'll be relieved that you planned ahead.
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