Save Valuable Time with these Bookkeeping Tips

April 26, 2013 by Ed Becker

Bookkeeping is the recording of all your business financial transactions and it has to be done accurately. If you are a small business owner then you will be wearing a lot of hats, leaving you little time for accurate accounts or bookkeeping.

1. Fortunately there are many financial software programs that help you accurately record all your business transactions. Using these software programs like QuickBooks minimizes the risk of human error, saves time and money.

First familiarize yourself with the software you intend to use so that you can derive the full benefit of it.

2. Do not compromise in your efforts to maintain daily transactions records of purchases, sales, etc. You do not want to miss any important and relevant information. Once you miss entering even one transaction, the backlog starts piling up and you will also not be able to remember relevant details. Instead, you will waste time searching for them. Discipline your bookkeeping for daily recording of your business transactions.

3. Keep digital backup copies of your data as well printing out hard copies. This is an essential safeguard and also saves time in retrieval and cross referencing of data.

Do not throw away receipts; keep them as proof of your transactions and to check the accuracy of your bookkeeping.

4. Check your records frequently especially receipts, tally them against actual book keeping figures. This way discrepancies and mistakes can be spotted and rectified in time. If you leave it too late, you will have to do a whole lot of rectification of data for a longer period which is a waste of time.

Categorize your expenses and receipts for easy accounting segregation and recording. It is easier and faster for you to create reports, draw up final accounts, compute your taxes etc.

5. Now that you have written all your accounts, it is practical to turn them over to a CPA for tax computing. A trained CPA will definitely cost you more, but with accurate tax deductions, you save money on taxes paid. Plus, it never hurts to have your accounts checked by an expert.

6. Review your plans, finances, taxes, and payroll and taxation strategy with your CPA. Meet with him or her on a fairly regular basis. You cannot leave taxes to chance. Your CPA will provide fresh ideas and strategies to your meetings; use them along with his or her expert advice to save thousands of dollars. Select a CPA who is supportive of your plans, not someone who is constantly negating all your plans.

7. Save time and paper by scanning your important paperwork, receipts, etc. NeatReceipts in QuickBooks allows you to directly import and helps audit proof your records.

8. Minimize cash usage to avoid losing write offs. Use your credit or debit cards and when you draw cash, note down the purpose for which it was drawn. Once again this is to prevent waste of time searching for details.

9. Keep personal and business accounts separate. This always makes sound accounting and business sense.

10. Save time and money by going paperless. You need more space to store tax documents and accounts from six years. Digitalize your accounts and other paperwork and store them in an USB drive or in online data storage.

11. Check and ensure that you comply with all payroll requirements and are using the correct forms and proper deductions are made at the correct rate for federal taxes, state taxes, Medicare, social security, etc.

Taking a little extra care following the above bookkeeping tips will make your bookkeeping less tedious and save you lots of time. Time saved is money saved.