Whether you’re just starting up or entering a growth phase, there’s no better way to drive your business forward than to have a solid bookkeeping system. It’s the behind-the-curtain magic that keeps your company thriving through the business year.
Here are four tips on ways to make sure you are prepared for when tax season rolls in:
1. BOOKKEEPING SYSTEM –
It’s tempting to try and get away with just keeping receipts or occasionally writing down basic details of big ticket purchases or deposits. While it might seem like overkill to create a meticulous system at this stage in your business’ growth, a system is how you scale your business. You’ll have insights into trends (good and bad) and it will help you make sure you’re hitting or exceeding your goals. Don’t wait until you’re trying to scale, create your system right from the beginning.
2. ACCOUNTING KNOWLEDGE –
Accounting is based on certain principles and rules. Take the time to know them so you don’t fall into an avoidable pitfall. It arms you with the necessary tools to secure the future of your business.
3. TAX METHOD –
Selecting the right accounting method—cash or accrual—will help you keep your books on point throughout the year. Most businesses will be cash, but certain industries like food and beverage, product distribution and manufacturing sometimes choose accrual, to anticipate future income or expenses. Know your method and keep your books accurate.
4. COMMUNICATION WITH YOUR BOOKKEEPER –
Keeping an open line of communication with your bookkeeping professional is paramount to your business’ success. By providing receipts, purchase invoices, etc. to your bookkeeper, you keep them from guessing. Also, by keeping them in the loop of upcoming business trends (i.e. future large purchases), you’ll keep them from wasting their time and your money.
Being strict and disciplined with these tips will strengthen your bottom line and take your business to the next level.