Many small-business owners would rather do almost anything than spend time keeping the books, preparing invoices or dealing with other financial and tax issues. It’s tempting to focus on the more exciting and seemingly beneficial things such as digital marketing, networking with colleagues, building a social media presence and simply selling.
But tending to financial basics is critical to keeping a small business of almost any size or kind on track. Here are some things that can help get (and keep) your financial house in order:
• Use a Web-based bookkeeping service. Don’t even think about trying to manage your business books and finances manually. Easy-to-use bookkeeping services for small business are available online at a low cost. The leader, of course, is QuickBooks, which offers several different online versions that can help you keep your books, but also run your entire business. WorkingPoint.com is a more budget-minded end-to-end solution.
• Take your billing and invoicing online, too. If you have bookkeeping covered, your business can still benefit from online invoicing. Online billing services that can effortlessly issue your invoices and keep track of everything are one of the most helpful, Web-based, small-business services available.
Freshbooks.com, for example, has hundreds of thousands of users. Sage One is a simple online accounting and invoicing solution designed for small business (www.sageone.com).
• Separate your business and personal finances. Many new business owners, and especially sole proprietors, fail to set up separate banking, bookkeeping and other systems to keep track of their businesses, causing confusion and potential tax headaches.
• Don’t delay; do it daily. If your business finances change daily, you should have bookkeeping systems that update daily as well. This should include daily sales, purchases and other transactions, and especially any cash transactions.
• Reconcile. Review your bank statements and balance your accounts regularly. Don’t just toss statements into a stack.
• Keep it simple and consistent. Bookkeeping is all about columns, and by keeping the same column headings all the time, you will avoid the frustration of mismatches. And if you avoid over-categorizing income and expenses, you’ll also save yourself time. Often it’s just not necessary to break things down into great detail. •