The most profitable businesses are usually the most efficient. How does your business rank on efficiency? More than merely organizing the workflow and scheduling, having your bookkeeping organized with an airtight system is critical to your success. With that in mind, here are five tips for financial organization.
1. Create a Bookkeeping System
A bookkeeping system can be as simple as a spreadsheet that tracks your income and expenses. For business owners just starting, that is a common way to begin. Provided that you are consistent in inputting your financial data, this system can work well.
As you begin to see what the numbers show in terms of your financial status, it is important to plan your business finances accordingly. Make income projections, anticipate future expenses, and set financial goals for your business. This journey can begin once you have a system in place so you can see where your money is going.
For businesses with more complex bookkeeping needs, financial software such as Xero or Quickbooks is a logical next step for your record keeping.
2. Your Bookkeeping Should Be in the Cloud
Life in the twenty-first century more and more involves cloud-based software. Bookkeeping and accounting services are no exception. Keeping your financial data in cloud services, such as Google Drive or Xero, provides two clear advantages:
You have your files with you wherever you go. Should you be out shopping for major business items such as office hardware or a company vehicle, there is no need to bring financial files with you to determine what your budget should be. You can access all that data via an app or mobile browser, so you are not caught off guard during a sales pitch.
Your files are safe in the event of a disaster. No one ever expects that a tragic event such as a fire or earthquake will destroy their property, but these things can happen when you least expect it. If your bookkeeping software is in the cloud, that is one less thing you need to worry about recovering.
The future of bookkeeping is in cloud-based services, so adapting to this trend will be more efficient in the long run.
3. Hire a Professional Payroll Service
If you’ve reached the point where you need to hire employees, it is advisable to retain the services of a professional payroll service. Keeping up on the ever-changing specifics of federal, state, and unemployment taxes is a complicated job. It could easily absorb too many valuable hours of your time that would be better spent earning money for your company. Not to mention, if you make errors in payroll taxes, fixing them can be very costly and time-consuming.
If you only have one employee, doing payroll can be manageable. More than that, and hiring a payroll professional is highly advisable to make sure your financial records are solid.
4. Invest in Quality Document Management
Managing critical financial documents such as receipts, invoices, and bank statements can be frustrating and time-consuming if you don’t have a system in place or don’t take the time to keep it updated. A quality financial document manager such as Hubdoc can make your record keeping painless.
Rather than spending your valuable time doing data entry and filing, a document management service gives you the ability to send your documents in via an app, email forwarding or uploading. The service reads the information, categorizes it for you, and sends it to your bookkeeping software or Google Docs, saving you time and headaches.
5. Hire a Reliable Bookkeeper
Just as it is time to hire a payroll specialist when you expand your team, when your finances get too complicated, bringing a reliable bookkeeper service on board is a wise idea. If you find yourself frustrated at how much time it takes to keep up on your books, or you are in over your head with your level of understanding, a professional bookkeeper can make your headaches go away.
When considering whether to hire a professional bookkeeping service such as Prophets Bookkeeper, the cost can certainly be a factor, as it is a significant financial investment. But looking at is an investment also helps to frame the decision properly. Some questions to ask yourself include:
How many hours per week am I spending on my books?
What is the dollar value of my business hour (multiply that times # of hours spent to get the total cost)?
What else could I be doing if that time was freed up? More revenue-generating activities? Training employees to be more efficient? Spending more time with loved ones?
When you run the numbers, you may find that the time and headaches saved are well worth hiring a bookkeeper. If your time is freed up to make more money, your business will grow as a result.
Nathan Stadler at Prophets Bookkeeper is passionate about helping business owners create a financial plan that will allow them to be stress-free about taxes and dream again about what their business could be. Be on your way to a solid financial future. Contact Nathan today to set up a free initial consultation.