Bookkeeping is one of those things that small business owners either love or hate. There are many critical bookkeeping tasks that will destroy your business if you don’t take care of them. It’s so important to get them right. Whether you take them on, or you hire a bookkeeper, you can’t afford to avoid them.
Keep in mind the advantages that SyncLedgers offers, too. With our help, you can keep all these critical bookkeeping tasks under control. The best part is that it comes without all the costs of a full-time, in-house bookkeeper.
Saving Small Receipts You Aren’t Required to Keep
In many areas, tax laws may not insist that you keep receipts for transactions below a certain value. Just because you don’t have to, though, doesn’t mean you shouldn’t anyway. Those little transactions still need to show up in your ledgers so they can balance. Throwing away the receipts can make that harder.
If you don’t want to keep paper around for tiny purchases, remember that scans are acceptable.
Tracking Accounts Receivable Aging
You may have lots of customers and orders coming in, but are they all paying when invoices are due? Keeping track of accounts in arrears is a critical bookkeeping task. That’s because it’s essential to maintaining your cash flow. Letting too many accounts go beyond 90 days without paying can cut off your oxygen supply!
Without staying on top of delinquent accounts, your business could become a pushover. You would produce a lot in exchange for almost nothing. That’s not sustainable.
You need to review and put in order the ledgers every month. It’s one of the most important ways to detect and correct errors and outright fraud. Companies that fail to carry out reconciliations are subject to cascading financial failures. This can end not only in bankruptcy but also jail time.
Never let a month go by without a thorough review of all accounts. This will let you generate reports that detail the company’s financial status. Remember that SyncLedgers makes this part a lot easier for you.
Proper Expenses Categorization
It’s not enough to only show cash withdrawals on a ledger. Every expense your business makes needs to have a specific purpose and category. Not all expenses are equal. Some can be offset by tax benefits, and others can’t.
You have to make sure that you know why you’re spending money. That’s the only way to have any hope of increasing profitability and lowering costs. You can’t cut payroll the same way you might reduce inventory purchases or utility payments. Categorization provides clarity and vital feedback that your business can’t succeed without.
Using Depreciation for Eligible Large Expenses
Did you recently buy a new load of office supplies at the same time as the new copy and fax machine? Don’t expense them the same way! The cost of pens and paper you can write off now, but that expensive and fancy new equipment? It’s good for years, and it has a salvage value.
You can spread the cost of buying and using it across many years instead of taking a hit all at once. It’s better for your bottom line to take advantage of expense depreciation.
Make sure your bookkeeper knows the difference!