I hope you're ok.
Starting a new small business is so exciting. The excitement of pursuing your passion and realising your dreams is unmatched (I literally buzz off my work). However, amidst all the creative and strategic thinking, there's one crucial aspect that might not seem as glamorous but is absolutely essential: bookkeeping. In this blog, we're going to emphasise the importance of bookkeeping for new (and old) small businesses and provide you with four invaluable tips to keep your financial ship sailing smoothly.
Tip 1: Bring in the Experts - Get an Accountant
Sure, you might be a pro at your business, but when it comes to managing finances, a professional touch is indispensable. Hiring an experienced accountant can save you from costly mistakes and help you navigate the complex world of taxes and financial regulations.
**Example:** Consider Sarah, who owns a ABC beauty business. She thought she could handle her finances independently. However, after her first tax season, she realised that she missed out on several deductions and ended up paying more than necessary. With the guidance of an accountant, she not only saved money but also had peace of mind knowing her finances were in expert hands.
Tip 2: Keep Those Receipts
Receipts might seem like flimsy pieces of paper or annoying emails, but they are the building blocks of your financial records. Make it a habit to keep all your business-related receipts, both physical and digital. These little pieces of paper hold a treasure trove of information that can be vital during audits or when tracking expenses.
Extra tip: I have created an email address solely for receipts and invoices. I just take a picture with my phone and email it to the email address, give my accountant access and that’s the last i think about it, as they take it from there.
Tip 3: Separate Business and Personal Finances
This is a golden rule often overlooked by new business owners. Mixing personal and business finances is a recipe for confusion, stress, and potential financial disaster. Open a separate bank account exclusively for your business transactions. It simplifies bookkeeping, helps you track income and expenses accurately, and makes tax time a breeze.
Tip 4: Consistency is Key
Consistency in bookkeeping is like a magic wand for small businesses. Set aside dedicated time each week or month to update your financial records. If you have a booking system that will record everything for you, it is as simple as downloading a spreadsheet. Whether it's recording sales, expenses, or reconciling your bank statements, make it a habit. This regularity not only keeps you organised but also gives you a real-time snapshot of your business's financial health.
In conclusion, bookkeeping might not be the most glamorous aspect of running a small business, but it is undoubtedly the backbone of your financial success. Don't underestimate its importance. By getting an accountant, diligently keeping receipts, separating personal and business finances, and maintaining consistency, you'll set your small business on a path to prosperity.
Remember, just like Sarah from our ABC beauty business example, you too can avoid costly mistakes and enjoy peace of mind knowing your finances are in order. So, take these tips to heart and watch your business flourish with well-maintained books!
If you have any questions or would like accountant recommendations, feel free to pop me a message, Im happy to answer anything.