Running your small business effectively involves factors beyond taking care of customers’ needs, leading your team, and allocating resources.
These aspects are indeed essential for growing your business, but there is another function you certainly don’t want to neglect: bookkeeping.
Bookkeeping refers to the process of keeping track of every financial transaction within your business. Bookkeeping plays a significant role in managing your business’s finances. It basically tells you where your money goes and where it comes from.
A dislike of poring over spreadsheets is not unusual. However, you should conceptualize bookkeeping as a way of recording how well your business is performing financially. Business owners tend to forget about it due to their busy daily schedule, which can lead to financial chaos.
But bookkeeping is one of those tasks that no business owner should neglect. Read on to learn the 10 must-know bookkeeping tips for business owners.
1. Don’t mix business with personal finances.
Avoid commingling personal expenses and income with those from your business. The best way is to open a business bank account as soon as you receive your business certificate from the Companies Commission of Malaysia (SSM) and get a separate business credit card. This not only avoids confusion but also builds the credit rating for your business.
2. Incorporate automation.
Entering data manually into spreadsheets after each transaction is too time-consuming. Switch to cloud-based bookkeeping software and manage your business’s finance online.
In addition, it enables the synchronisation of your bank statement with the bookkeeping record; thus, you will always have accurate and updated records.
3. Get expert advice.
You hire an accountant for a reason. If you have one, ask them for advice on using bookkeeping software. If you are the one who does the numbers, hiring an expert will help as well. This means using automated cloud-based accounting software that offers advice.
4. Schedule regular financial check-ups.
You can circumvent bounced checks, overdue invoices, or confusing figures by avoiding the postponement of financial reviews. Check your accounts weekly to make sure every record is tracked.
5. Do a quarterly review.
This is similar to the 4th tip we shared but in a more macro fashion. At the end of each quarter, conduct a deep-dive review of your accounting records.
This is where you look for trends, such as growth or decline in sales, revenues, or an increase in overdue invoices. Our bookkeeping software has the ability to generate insightful financial reports which are relevant to your business. Therefore, you can make better financial decisions.
6. Keep track of business expenses.
By tracking your business expenses, you can decide what types of expenses to deduct next year. Other than that, maintaining detailed records allows you to claim tax relief. You can also simplify expense tracking by using bookkeeping and invoice software.
7. Monitor your employees’ hours.
Use cloud-based time-tracking software that allows employees to clock in and out across devices. Other than saving them time, it also makes it convenient for you by automatically tracking overtime, PTO, etc. Choose the one that suits your business’s needs, and payroll will become easier than ever.
8. Pay attention to accounts receivable.
Ensure your customers pay on time. Otherwise, your business’s cash flow will suffocate. Keep your eyes on overdue invoices and payments, and contact the customers regularly. If a customer is suffering from financial discomfort, try to set up a payment plan, so you get at least some of what you deserve.
9. Meet the tax deadlines.
Never delay tax payments, but always plan ahead and allocate money for any upcoming tax bills. In the end, you won’t have to worry about unnecessary spending on fines.
Consult any official at the Inland Revenue Board of Malaysia (LHDN) for the tax deadlines. After that, set a reminder in your accounting software to notify you days or weeks in advance about upcoming tax payments.
10. Let us help you.
We offer the most trusted and secure bookkeeping software. If you are looking for easy accounting software for small businesses, try our service.
Even with the simple user interface, we can help you with all aspects of small business bookkeeping and accounting, including generating financial reports, syncing with bank accounts, cloud-based accounting across several devices, and more.
In addition, we also do our best to make you feel safe while using our software. That’s why your account information is highly secure within our system. For more information, feel free to get in touch with us.