Updated: Dec 12, 2019
Bookkeeping isn’t very difficult in theory, but there’s no doubt that plenty of organization is involved. Need help getting your finances in order? Here are a few bookkeeping techniques to help you to do just that:
1 - Separate your accounts
A crucial bookkeeping practice to remember is that you need to keep your personal finances separate from business finances. Just like apple juice and cement, you shouldn't ever mix them together (and definitely do not try eating that concoction).
You can start off by focusing on checking accounts. Make sure that they're all separate. Create a separate business account for any business-related transactions. If you're a freelancer, you can still apply this method.
Anything you spend on work, such as business travel expenses to paying for internet connection (for remote workers), can be counted as a business expense. If you have an agency, expenses such as rents and wages are counted as business expenses.
If you do end up mixing them, do not fret. Ask your fellow accountant for a guide on how to record transactions. This way, you will still be able to distinguish between business and personal finances.
2 - Hold onto your receipts
When your business makes a sale or pays an expense, keeping track of your receipts will make your accountant's life much simpler. You can do it old school and create a box to drop all your receipts in, but you're in the 21st century! There is plenty of software out there to help you with this in a more efficient way.
3 - Check your bank statements
If you're on a roll logging every receipt, surprises can still catch you off guard. Anything from posting an expense incorrectly or missing a bill can happen. This is why it’s important to reconcile your records with the bank instead of just tracking expenses on your own.
This process takes time as it requires going through every document on the book and comparing it with the amounts in your bank statement. But did you know that you can complete this process much faster?
Thanks to technology, we now have access to bookkeeping software! Bookkeeping software can automatically grab transactional information from the bank and compare it with your bookkeeping entries. Not only will this save you lots of time, but it also allows you to manage your business' finances much more effectively.
4 - Ask an expert
Nothing beats a good-old face-to-face consultation. Even with our tips to get you started on the right path, an accountant can tailor to your exact needs with a one-on-one session. No one company shares all the exact same elements with another company. While our guide will cover the general stuff, an accountant will deal with specific details.
Details include local tax and compliance laws that differ from area to area and from business to business. There are so many different aspects and issues for you to deal with when it comes to money. Thus, an expert is vital to help you screen out the mess and focus on what actually matters.
With newfound information, you can now head out into the business world with full confidence. With sound financial practices, you can make sure your business’s books are in proper order. You can never go wrong by hiring an accountant as well!
If you’re looking for an ecommerce accountant in Australia, get in touch with us today for a free consultation!