It’s natural to run your own bookkeeping when you start your business or as you grow. But as a business owner, you need to be sure that your bookkeeping is done correctly. This will allow you to effectively track your business, be ready for taxes, and also have a good bookkeeping structure in place when you grow large enough to delegate the bookkeeping to somebody else, so that you can focus on running the business. In this episode of MissionBusinessPodcast.com Bernard Roesch discusses common mistakes he sees business owners make when running their own bookkeeping.
If you have any questions about this podcast episode, please feel free to contact us.
Don’t Do Bookkeeping After the Fact
Many businesses wait to do bookkeeping until after the business transactions have been completed. For example, you might update your books at the end of the month or even wait until the end of the year before tax time.
While you’re focused on sales and running the day-to-day operations of your business, this leaves you at a significant disadvantage when it comes to knowing your business financials. It also is extremely inefficient, as it causes a lot of work that needs to be done at the end of the year.
Do Bookkeeping While You Run the Business
Doing your bookkeeping as part of day-to-day business operations puts you at an advantage because you will have the financial information available, and also allow you to be prepared when you need to present that information for taxes. To make this possible, consider the process of how you run your business. Integrate your bookkeeping into each of the steps of how you run your business. For example,
- When you get a new order, create a sales order in QuickBooks.
- When you ship that new order to your customer, create an invoice using that sales order.
- Finally, when you collect payment, record that in QuickBooks as a received payment.
- This enables you to have the entire transaction appropriately logged within your bookkeeping while not adding additional work at a later time.
By integrating bookkeeping as part of the process of how you conduct your business, you keep your books up-to-date as you run your business.
Mapping Out Your Business and Bookkeeping Processes
Getting to the point where bookkeeping is done as part of day-to-day business operations is sometimes challenging for business owners.
- Take some time to map out your business process and what activities are needed in order to run your business day-to-day.
- By mapping out invoicing, receiving of payments, deposits, and other bookkeeping items, and then connecting those to your day-to-day business processes, you can integrate your bookkeeping processes into your day-to-day business operations.
We Can Help You
If you’re currently running your own bookkeeping, but need support on how to set up proper bookkeeping processes, contact Bernard today.
You can also visit MissionBusinessPodcast.com for more insights that Bernard has been sharing with us in the previous episodes.