Small Business Bookkeeping Deadly Sin #2: Not Doing the Books Often Enough
One of the biggest sins that small business owners commit is that they put off doing the books for weeks or months at a time.
Many small business owners think that bookkeeping is just a means to filling out your taxes. With this mindset, you miss out on the many benefits that a regular bookkeeping system can provide you with.
Your bookkeeping should be a tool that helps you run your business. Use it to help you make critical decisions and move your business in the right direction. If you only update your records once a year, you may be neglecting important information. It will also be too late to fix things by the time you have realized there is a potential problem if you only do your books once a year.
You won’t know how profitable your business is without up to date books. Regular bookkeeping helps you to prepare your financial reports and allows you to analyse them. This will allow you to know where you are in relation to your budgets and goals within your business.
You’re not an accountant, so it’s understandable that bookkeeping is a chore for you at the end of your long day. But, if you understand that you can get very valuable information from your bookkeeping, and realise just how easy it can be, you are more likely to make it a priority.
You need an accounting program for your small business that is easy to use, so you actually do use it regularly. This will save you hours each day and every week.
Cashflow Manager is based on the manual cashbook method small business owners used before software programs tried to turn everyone into accountants. With Cashflow Manager, you just have to record the money you have received in the appropriate column. When you pay someone, you add the amount into the column that describes the type of payment (eg. telephone, stationery). That’s how simple it is.
If you are registered for VAT, Cashflow Manager can calculate your VAT and create your VAT report that you can lodge online. The program can even help you make sure your records balance to your bank statements.
You’ve heard of the saying ‘an apple a day keeps the doctor away’. Well, when it comes to bookkeeping, 15 minutes a day keeps the creditors away.
Click here to read the introduction to “The 9 Deadly Small Business Bookkeeping Sins… And How You Can Avoid Them”
Keep an eye out for ‘Deadly Sin #3’ coming to the Cashflow Manager Blog soon!