5 Good Bookkeeping Habits Business Owners Can Adopt

5 Good Bookkeeping Habits Business Owners Can Adopt

A business owner is often faced with a myriad of business-related problems because of bad bookkeeping. Although bookkeeping is only a tiny fraction of business management, failing to track your expenses can result in costly disaster. Businesses that continue to survive and thrive have a good bookkeeping system in place. If your bookkeeping task is in chaos, here are some habits you can adopt to improve your bookkeeping system. 

1. Purchase the right software

Traditional bookkeeping takes a large chunk of your time as you need to be focused on manual processes. With bookkeeping software, you will be able to reduce manual tasks and streamline processes. While there are are many bookkeeping systems for you to choose from, not all of them meets your needs. When searching for bookkeeping software, always take your business needs into consideration. 

2. Give importance to expense receipts

Monitoring how much you are spending on your business will help you keep your cash flow intact. Purchasing office supplies, paying your monthly bills and traveling for business purposes are part and parcel of managing a business. However, not keeping track of these expenses can have a negative impact on your cash flow. You may think you still have enough money to take care of your monthly bills, but since you have not done any regular monitoring, you realised that you no longer have cash left. Keeping expense receipts enables you to know the amount you are spending. 

3. Get professional help when preparing tax returns

Tax time can be stressful to most business owners especially to those who resort to DIY bookkeeping. However, there are still ways you can make the process less challenging such as hiring a professional to help you get the job done. Preparing tax returns require accuracy to prevent an audit from ATO. Make sure you leave the job to a bookkeeping professional.

4. Do not go completely "hands-off"

A business owner might think that outsourcing a bookkeeping professional takes care of the task and there is no need to check reports and other essential information. Wrong. As an entrepreneur, it is still important to know your financial health and business performance. This way, you will have an idea whether or not it is time to grow your business. Having a basic understanding of bookkeeping and accounting will keep you on the right track. 

5. Track your receivables

Monitoring clients who have not made a payment is not an easy task because you need to classify your invoices to prevent them from mixing up. Tracking receivables will be made much easier with the help of bookkeeping software. It enables you to classify invoices so you will know which ones are unpaid or late. 

Tamara Deterding

Written by : Tamara Deterding