New year gives us all a clean slate, doesn’t it? When it comes to bookkeeping, not having clean books can make you dread your taxes. Let’s admit that accounting tasks are quite nerve-wracking for people who do not have any grip on the subject.
However, there are still many companies, small ventures, and individuals who are cutting it without any form of professional help from the experts. This should come as a relief to all of those who cannot afford to have a separate accounting department just yet.
So, what is it that you need to get through your finances without professionals but with better efficiency?
Here are a few things that can help you get started with working like professionals with minimum room for errors:
Use an accounting software
With how fast everything around us is evolving, it is no surprise that accounting functions can be done accurately using accounting software. There are a number of highly reliable accounting software that even the accounting professionals themselves are using.
These accounting software programs reduce your margin of error and are built to perform extremely tedious tasks at a fraction of a second without requiring much effort from you. Many of these software like Xero, Quickbooks, and MYOB have packages tailor-made for small businesses covering the basic accounting function templates. Always plan ahead for major expenses
One of the areas where many fail at accounting is when there is a big-budget task to accommodate. While it may be usual for your business, many times due to lack of prior preparation you may find yourself in a financial frenzy. It could also lead to companies overspending on things that could have been easily accommodated.
Always budget the major expenses prior to when you need to actually spend on them. When you keep a portion of your finances aside for mandatory stuff first, you will have a clear picture of how much money is left for you to spend. This way neither will you run out of cash for the essential stuff nor will you end up overspending on the basic things.
Keep going through the invoices
Piled-up receipts and invoices can be a nightmare to sort. And it is when you have heaps piled up when you tend to miss the important deadlines. Instead of having to overpay due to late payment, keep going through your invoices. Develop a system for sorting the invoices that work out for you. An accounting system will help you automate your invoices and receipts for you. There are many off-the-shelf software e.g., Hubdoc that help you take photos of bills and it automatically integrate them with your accounting software.
A lot of accounting software provide cash flow projections based on invoices to effectively manage your cash and you never miss out on due dates and overdue payments.
Do monthly check-ins for accounts receivable
Your income may drastically dwindle if your accounts receivables are not in order. By being not in order, we mean that your customers have not cleared your payments on time. If you keep missing that and wait for them to clear it with the next month’s payment, you may be short of cash
Have a professional as your advisor/consultant
Yes, on the other hand, you can have a professional manage your bookkeeping for you. . Having an advisor or a consultant helps you with streamlining your accounts while improving your own knowledge of accounting and bookkeeping.
They can advise you on organizing your accounts and how to sort your books more efficiently. There are numerous virtual accountants and bookkeepers available just an appointment away.
In a nutshell, there is so much that you can do to keep your company out of troubled waters only if you take action at the right time in terms of bookkeeping. It is just the first month of an entirely new year which should be motivating enough to help you get started.
Do let us know in the comments section below what works for you best.
Until then, it’s a wrap from us!