Countless freelancers, small business owners and entrepreneurs struggle to find the time to keep on top of their bookkeeping and accounting. Quite frankly, when you own your own business, you have more important things to do to keep your business running. Bookkeeping has been neglected for a long time by small business owners but it is still a critical part of running a business.
Here’s what can happen if you don’t maintain your bookkeeping:
- The lack of bookkeeping makes it impossible to plan for and file your taxes correctly.
- It also makes it impossible to uncover the tax exemptions you deserve so that you can reduce taxes owed dramatically or potentially get a refund back.
- Plus, you can also fear skipping the deadline and paying the penalty if you are rushing at the last minute to get your financials together for tax filing. But it doesn’t need to be like this.
Luckily, with technology, there are a number of ways that small businesses can simplify their bookkeeping while still keeping their financials in order.
Advantages of having your Bookkeeping organised
Large organisations employ countless staff to manage their finances for a reason. Having your bookkeeping organised helps you run your business better. It will take a small amount of your time on a regular basis but the time and work you save by doing this will make it worthwhile. Here are some of the advantages of having organised bookkeeping:
Organized Finances – As a freelancer, it is important to know where your money is coming from and where it is going as well as how much is coming in and going out. Having this information organised and clear will help you save money, save time when doing taxes and make more informed decisions about what investments are worthwhile.
Digitised Bookkeeping – When you use a bookkeeping tool, your small businesses bookkeeping and financials will all be stored and organised in a clear manner on a digital platform. In only a few taps, you can simplify invoicing, organize costs, monitor time, and accept payments electronically with the right apps. Apps let you fit in bookkeeping into your schedule when its most convenient. You don’t need to be in an office or set aside time.
Get paid and pay your bills quicker – When you have your money and bookkeeping processes in order, you can get things done quicker. If you have a simple invoice app, you can quickly send an invoice in a few minutes or on site with your customer and get paid straight away. When you can clearly see what expenses you have coming in, you have the ability to pay bills and know how that will affect your finances.
Essential Rule to Simplify Bookkeeping
Thanks to technology, small business owners, freelancers and entrepreneurs now have access to a range of tools to help them simplify their bookkeeping. You can automate invoicing, organize expenses, log time, and accept payments online in only a few taps using the right bookkeeping app. These apps help you save time by reducing the time you need to spend maintaining your company’s financials. Here are some things you can do while using these apps to really get your bookkeeping in shape:
Register All of The Company Receipts Later For Easier Accounting – It’s best to hang on to all of your company expense reports to ensure you have all the deductions you deserve and can prove your expenses if ever audited.
Organise your receipts in advance for tax time – To organize and store all of your receipts over the year, many small business owners use a quick and convenient expense tool. The tool will take an image and digitally file it with the transaction. If you need to pull up the transaction at any point, simply search for it and you’ll have proof with the saved photo of the receipt.
Keep Capital Aside For Future Taxes – Business owners must always be prepared for tax changes or future tax payments that might affect their business. Having the money available will save you time and money when these occur. To put enough money aside, look at the business tax rates of where you live. See how much you’re projected to pay and put aside some money accordingly. You can set up installments into a savings account on a schedule that suits you if you’re worried about spending too much. Having these funds put aside will help you at tax time and will prevent you from scrambling from finding the funds to pay your tax or taking out a loan.
Keep Up to Date Tax Reforms – Small business owners need to be well aware of any amendments to tax legislation. Visiting your government’s tax page and reading over some announcements and adjustments is one way to keep up to date. You can also chat to your accountant or read some do-it-yourself tax filing program blogs and alerts.
Use good digital tools – If you really want to save time and doing efficient bookkeeping, you need to use good software. You’ll do less manual entry and you’ll be able to complete your bookkeeping and accounting tasks quicker. Don’t be scared to pay for software either. The time you save will most likely mean that paying for a subscription would be cheaper than the cost of your labour or an accountant or bookkeeper’s labour. If you find a good tool, all you need to do is send the reports to your accountant at tax time and they’ll do the rest.
In short, bookkeeping is an essential part of doing business but it doesn’t have to be time-consuming. If you’re struggling with bookkeeping, or even if you need to finish several years of historical bookkeeping, the right tool will help you get it sorted and stay on top of everything in the future. Find good tools and stick to the simple processes that your business needs to function and you’ll be able to get your head out of the books and back to doing business.