By Laura Melville
Get organized. Stay timely. Be informed.
These three mandates can change the way you manage your books and free you up to focus on other tasks needed to grow your company.
Here are some effective bookkeeping strategies to help keep your business on track.
- Understand and communicate the importance of timely and accurate financial reports. Make sure responsible parties are trained on how to keep records, how to create reports and when those reports are due for review by management. Setting and adhering to a schedule ensures that data are reviewed timely and consistently so that you can identify trends, know and understand the status of your business and make informed decisions.
- Document expenses. Make sure you have a clear understanding of what is deductible and what the requirements are for documentation — such as the date the expense was incurred and the business purpose, to name just a few — to back up your claim.
- Know recordkeeping requirements. It’s crucial to be aware of unique recordkeeping requirements for your specific industry. For example, attorneys who deal with IOLTAs and Client Trust Accounts face the intricacies of handling those trust accounts. You must maintain accurate information, make timely reconciliations and adhere to other recordkeeping procedures, as well.
- Outsource. If you are not ready to hire a full-time bookkeeper, outsourcing may be the answer. Many small businesses try to do their own bookkeeping in an effort to save time and money, but as they grow, that may not be a viable solution. Time spent on bookkeeping is time not spent making sales and growing your business. If recordkeeping errors occur, the time needed to fix them, and any penalties incurred, could prove very expensive. If you choose to outsource, however, that doesn’t mean handing over the books, walking away and not looking back. Stay on top of what’s happening in your industry and schedule periodic reviews with your bookkeeper/accountant so you have a clear understanding of where your business is, and where it can go.
- Research apps. Many business apps integrate with various accounting software packages to give you enhanced results in a fraction of the time you might think it would take. For example, time-tracking apps track time on jobs/clients/business units, allowing you to increase your profitability. You’ll receive valuable data that can be used to produce future service proposals, run payroll, invoice clients, verify subcontractor vendor bills and determine what’s working … and what might not be. Similarly, if you have expense reports that need to be submitted or received for payment, there are very good apps that can sync with your bookkeeping software and significantly reduce the time spent to create or review those reports.
By taking these simple steps, you can maximize the effectiveness of your bookkeeping and grow your business at the same time.
Laura Melville is outsourced accounting supervisor at Wiss & Company LLP.