Bookkeeping can make several impacts to a small business, including the customer experience and profitability if only business owners would manage it. Richmond runs on the success of the many small businesses that provide services and products to the local community. As a small business owner, it’s essential that you manage all financial aspects of your operation to go to the next level. Even the best business plan and product offering can result in business failure if you don’t keep track of finances to truly understand your revenue and expenses. That’s where bookkeeping becomes essential to your business. What Bookkeeping Items Should You Manage in Your Business ? To make effective business decisions, you need to know where your cash is coming from, and where it’s going. Details of sales and expenses are critical, as well as an understanding of accounting principles that apply to your business, including any tax implications. This knowledge – or lack of – can impact your business in many ways: 1. Tracking Expenses It’s easy to lose track of where your capital goes, with business meetings, purchasing supplies, labor expenses, and so many other day-to-day activities. Bookkeeping processes accumulate all such expenses not only to get an accurate audit of where the money goes, but to keep a record for tax purposes, as well. 2. Missed Opportunities There are times when it may be advantageous for your business to purchase larger volumes of supplies or invest in new product development. Without an accurate picture of your cash flow and account balances,…
Most small business owners we talk to think that running a successful business involves hard work and loving what you do. While those two things are important, if you actually own a business, you know there are a few more details involved. One extremely important factor is bookkeeping. Bookkeeping is frequently an overlooked area in small business as it does not hold the flash and appeal that some other areas of owning a business hold. The good news is when it comes down to it, there are only a handful of things that actually matter. The sooner you incorporate the following five bookkeeping best practices, the sooner you can get back to focusing on working hard at what you love. 1. Not One-Size-Fits-All Bookkeeping is something that will differ from one small business to another. Specifically, you need to find a way to structure your accounts that makes sense for your unique business. Far too often, small business owners pick a template that works for others and assume they can fit their finances into this structure. Unfortunately, this practice comes at the cost of efficiency and accuracy, two things that should always be a part of bookkeeping. It’s fine if you need to revise your approach a bit as time goes on. The important thing is that you come up with an account structure that fits your business like a glove. 2. Organize Your Expenses Over time, you’ll most likely increase the number of credit cards and checking accounts you use for your…