51: 3 Tips To Keep Your Bookkeeping Up To Date Whether You Are Starting A Business, You Are Self-Em
Stress Relief. That’s what I am here to help you with when it comes to your business finances and particularly your bookkeeping, which is why today I am giving you 3 tips to keep your bookkeeping up to date. I know this is the time of the year when most business owners realize they may have fallen behind in their bookkeeping and they start to look for ways they can catch up before it is too late. They start feeling the stress and overwhelm creep up on them as the tax season starts to draw near. Oh my gosh, does this sound like a trailer to a horror movie to you? Well, I guess it is that time of the year when things start to get a little spooky, but I hope you are not in this situation. If you are, I’ll be going over these 3 simple tips for you in today’s episode. If you have fallen behind in your bookkeeping, don’t put it off any longer. Now is the time to really look at your financial statements and make sure you end the year exactly how you planned…or at the very least, you can end the year so that you are knowledgeable about your finances, and you can take advantage of any end of the year tax planning. You can certainly be strategic with tax deductions when you plan ahead, but if you wait until after the end of the year, it’s pretty hard to go back and make any changes. It doesn’t matter if you are using a computerized bookkeeping system like QuickBooks, Wave, Xero or FreshBooks or a manual system such as an Excel spreadsheet or Google Sheets, you need to have your bookkeeping in order so that you can prepare your tax returns, so why not make sure that this year’ books are up to date which will allow you to make smart year end business decisions. Whether you are just getting ready to start your small business, you’re a solopreneur, entrepreneur, small business owner, remote virtual online bookkeeper or virtual assistant, listen in and find out which of these three options you are going to utilize to wrap up your end of the year bookkeeping with this year…and believe it or not, now is the time to begin thinking about how you would like your bookkeeping to go next year…
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Show Notes:
Stress Relief. That’s what I am here to help you with when it comes to your business finances and particularly your bookkeeping, which is why today I am giving you 3 tips to keep your bookkeeping up to date. I know this is the time of the year when most business owners realize they may have fallen behind in their bookkeeping and they start to look for ways they can catch up before it is too late. They start feeling the stress and overwhelm creep up on them as the tax season starts to draw near. Oh my gosh, does this sound like a trailer to a horror movie to you? Well, I guess it is that time of the year when things start to get a little spooky, but I hope you are not in this situation. If you are, I’ll be going over these 3 simple tips for you in today’s episode. If you have fallen behind in your bookkeeping, don’t put it off any longer. Now is the time to really look at your financial statements and make sure you end the year exactly how you planned…or at the very least, you can end the year so that you are knowledgeable about your finances, and you can take advantage of any end of the year tax planning. You can certainly be strategic with tax deductions when you plan ahead, but if you wait until after the end of the year, it’s pretty hard to go back and make any changes. It doesn’t matter if you are using a computerized bookkeeping system like QuickBooks, Wave, Xero or FreshBooks or a manual system such as an Excel spreadsheet or Google Sheets, you need to have your bookkeeping in order so that you can prepare your tax returns, so why not make sure that this year’ books are up to date which will allow you to make smart year end business decisions. Whether you are just getting ready to start your small business, you’re a solopreneur, entrepreneur, small business owner, remote virtual online bookkeeper or virtual assistant, listen in and find out which of these three options you are going to utilize to wrap up your end of the year bookkeeping with this year…and believe it or not, now is the time to begin thinking about how you would like your bookkeeping to go next year…
Welcome Back…So you’ve decided you want your bookkeeping to be up to date and accurate, but you might be wondering what your options are to ensure this happens. Today I am going to cover three tips to keeping your books up to date. When you are a business owner, there are many times when you are flying solo, or you know you are the only one who is in charge of all the things. When it comes to your bookkeeping, you need to take a look at these three options to see what will work best for not only you, but for your business as well. As I talk about these three options, I want you to think about your time availability, your financial knowledge, your budget, and the work-life balance you want to achieve with your business.
First, we’re going to start off with the option of doing your own bookkeeping. This is the option most business owners opt for when they are first starting their business, and it could very well be the best solution for you. When you do your own bookkeeping, you need to weigh the options that are available for your skillset and budget. Of course there are options for doing your own bookkeeping with a paper journal or even a spreadsheet, and both of these options would have a very limited cost. If you think you want to use a computerized software solution, there are again many options to choose from. You could start with a free solution such as Wave, or you could pay for a solution such as QuickBooks, Xero or Freshbooks. All of these options are good options, but the biggest thing to consider when doing your own bookkeeping is that you need to understand what is all involved in doing the bookkeeping for your business. You will need to set up processes so that you can record all of your money coming in and going out of your business. You need to make sure you are staying on track and not falling behind and you need to make sure your processes for keeping track of your bookkeeping allows you to have the proper end result such as your financial statements so that you can have your tax return prepared at the end of the year. This may sound like a lot, but I know many business owners who do their own bookkeeping, and you could easily be one of them. One benefit of doing your own bookkeeping is that you know exactly what each of the transactions are for in your business. More than likely, you are the one initiating these transactions so when it comes time to capture them in your bookkeeping, you are able to record them with ease with the knowledge you have, or you know where you need to go to get the information you need. Another benefit is the cost savings, but you need to weigh the cost savings with the time commitment.
The second option is to hire a bookkeeper in-house. With this option, I recommend you have a job description written up in advance for your in-house bookkeeper so that when you do hire this individual, both you and your bookkeeper are on the same page when it comes to all the tasks needed to be done. This job description will also help you decide if you have enough work for them to do. Decide if you are going to have them work on tasks other than bookkeeping as well. Once you know you have enough work for your in-house bookkeeper, you want to make sure you take a look at the cost as well. Will you be able to afford to hire them, and what kinds of benefits, if any, will you provide for them? If you hire your in-house bookkeeper as an employee, make sure you consider the payroll taxes that will come along with their wages, and most importantly, make sure they are qualified to do your bookkeeping. Make certain they have the experience you are looking for and that they pay attention to details. If you are already using a bookkeeping system to do your bookkeeping, and you want to continue with that system, make sure they are knowledgeable with that system. It would also be beneficial if they have experience with the industry you are in so that they can offer advice or recommendations to help improve your processes. And then there’s the trust factor. You definitely want to make sure the in-house bookkeeper you hire is trustworthy. This person will more than likely have access to your bank accounts and other confidential information. You want to feel comfortable with this person, but you should also put systems in place to prevent fraud. Just because you have an in-house bookkeeper, doesn’t mean that you never have to pay attention to your books or your finances again. With their help, you will have all the financial information you need, but you also want to keep a pulse on your business, and especially your bank accounts.
The third option for you to keep up to date on your bookkeeping is to hire an outside or virtual bookkeeper. If cost was a drawback when looking at an in-house bookkeeper, this option will often save you money over hiring an in-house bookkeeper when you take all things into consideration. For example, you won’t have wages, payroll taxes, employee benefits or an office space for them. These savings can then be invested in your business instead. The prices that you pay are directly related to the specific engagement you are asking them to do for you. There is no down time that causes additional expenses, and you are not paying for any training time that you may have with an in-house bookkeeper. An outside or virtual bookkeeper will have the skills and knowledge to help you with your bookkeeping and since they have the experience of working with multiple clients, their processes are much smoother which results in faster turn around times for you. When you hire an outside or virtual bookkeeper, your main task as a business owner is to provide the financial and other information needed to your bookkeeper so that they can in return provide you with up to date bookkeeping and financial statements. This allows you more time as a business owner to focus on tasks that are important to meeting your business goals and following your strategic plans to grow your business. In most cases, your outside or virtual bookkeeper will also have the bookkeeping software needed to record all your transactions which will also save you money since you don’t need to purchase it yourself. Keeping the future in mind as your business grows, your outsourced or virtual bookkeeper will likely have the experience and skills to grow with your business by adding additional services your business needs, such as payroll, when and if you decide to hire additional help with your business. And, did I mention, you don’t have to deal with the stress or having to plan for what you would do if your in-house bookkeeper quits?
As your business grows, you might find yourself in different stages of these different bookkeeping options, and that is completely normal. If you are not sure which option is best for your business, or if you are interested in getting referrals for an outside or virtual bookkeeper, reach out and let me know. You can go to https://www.financialadventure.com/Contact-Us and let me know what you are struggling with or how I can help. If you decide to do your bookkeeping on your own, but you wish you had someone you could ask questions to and help keep you accountable, make sure you check out my new Mastering Your Small Business Finances Membership for business owners. I provide additional resources from this podcast, hold Q&A sessions as well as dive deeper in the topics covered on the podcast. I’ll be adding a quiz to the membership site for this week’s podcast for you to take to see if you have the skills needed to do your own bookkeeping. You can go to www.FinancialAdventure.com/MYSBF – which stands for Mastering Your Small Business Finances if you are interested in joining us in the membership and taking the quiz this week. I’ll post links for this membership and other resources so that you can easily find them where you are listening to this podcast and in the show notes.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.
