Are you new to accounting and trying to find ways to manage financials as a small business bookkeeper? If you’re doing your job right, you’ll want to make sure that your company is getting the support it needs to thrive.
So, how can you manage your company budget with the best outcome possible? Good thing you’re in the right place!
Keep reading for some bookkeeping tips for a prosperous business at the end of every financial quarter. Let’s get into it!
Ensure You Have a Debit or Credit Card That Offers Rewards
Make sure you have access to a debit or credit card that offers rewards for shopping. These rewards may help with reinvestment and expanding the business.
When making purchases for the business, it is important to track all of the expenses and use the reward credit card to maximize savings. These points can be applied to business expenses such as:
- Buying supplies
- Advertising materials
- Travel expenses
- Business meals when entertaining clients outside the office
By having a rewards credit card, you can stretch your budget further and get the most out of your expenses.
Create a Budget and Review It Regularly
Establishing a budget and reviewing it regularly is key for managing business finances. The budget should include both revenue and expenses, plus payroll and inventory, so that cost is well accounted for.
The bookkeeper should also compare the budget to past performance and industry trends. This will help you know how the business is doing financially and to spot any variances.
Additionally, cost control should be the main focus as this will help the bookkeeper make adjustments where necessary. Finally, monthly financial reviews should be conducted to ensure the budget is being used correctly.
Initiate a Good Relationship With a Financial Institution
It is essential to establish a good connection with a financial institution. You can do this by gathering all documents related to your business finances such as:
- Bank statements
- Credit card statements
- Invoices
Also, you’ll need to open a business account and deposit any funds linked to the business. In addition, you should look for local banking options that are well-known and reputable like:
- A bank
- A credit union
- An online financial institution
Lastly, be certain to review any fees related to using the financial institution’s services or access to their accounts on your end. This can help you avoid overspending or being charged fees that you weren’t aware of.
Use an Accounting Software
Accounting software simplifies and automates the difficult task of bookkeeping. This allows bookkeepers to store and manage important financial data in a single, easy-to-use system. Additionally, it aids bookkeepers to:
- Accurately track and record expenses
- Keep tabs on accounts receivable and payable
- Trace income
- Generate financial reports
Moreover, the software can be used to keep track of customer relations, create invoices and billing, and construct detailed budgets and forecasts. Overall, this software is an efficient way to manage financial data efficiently and quickly.
Know Your Tax Obligations
When it comes to taxes, you must be aware of all local, state, and federal taxes you must pay and make sure to file the correct documents promptly. In addition, be sure to keep detailed records of all tax payments.
Also, setting up a retirement plan for yourself and your employees can help save money on taxes. Finally, stay up to date with any changes in local, state, or federal regulations that may affect your business’s tax obligations.
Being proactive when it comes to taxes can help you avoid penalties, fines, and other potential problems.
Establish Financial Targets and Benchmarks
Setting up goals helps you focus on a destination and gives purpose to your financial decisions. Start by using your current financial documents to analyze your current economic standing.
Next, take a look at your income, expenses, and assets to calculate any cash flow and profits. This will help you evaluate your progress to identify what strategies need to be changed.
Additionally, your benchmarks should be realistic enough that you may be able to adjust them if needed. Lastly, don’t forget to allocate the resources necessary to reach them and create a timeline for your success.
Invest Surplus Profits the Right Way
Another important step is to make sure that all income and expenses are properly accounted for in the ledgers. Surplus profits should be invested the right way by:
- Investing in new equipment
- Expanding the product line
- Putting money into a new facility
It may also include taking advantage of tax considerations, such as using 401Ks or IRAs. Whatever the method, it is important to have a plan for surplus profits and to review it regularly.
Always Pay Suppliers and Creditors
It is best to pay suppliers and creditors on time. Organize payment terms with them and communicate them to all involved parties. Also, you need to track when payments are due and account for any discounts offered by certain merchants.
Furthermore, ensure all invoices are paid in full, including any late fees or interest that may have accrued. You may also, utilize cash flow-forecasting techniques to anticipate when funds may dry up so payments are made on time.
Additionally, you may enroll in automatic payment plans to ensure timely payments each month. Ultimately, maintain effective and open communication with suppliers and creditors to build and maintain trust.
Consult With Knowledgeable Financial Advisors
Having a financial advisor will let you gain insight into money management strategies and proper business practices. They are privy to the latest tax laws, making them the perfect people to turn to when looking for advice.
It is best to seek help to ensure the results are accurate with a consistent review. Contact an accounting firm near you for assistance when needed.
Tips to Manage Finances as a Small Business Bookkeeper
Overall, managing finances as a small business bookkeeper is achievable when utilizing the right tools and strategies. Create sound financial principles, practice accurate record keeping, pay attention to cash flow, and remain in compliance with changing regulations.
To get a head start on your bookkeeping, contact an advisor to learn more about the benefits of their accounting services. Did you find this article helpful? Check out the rest of our blog now!
