Starting your venture is fun and exciting. However, running it successfully is a challenge. You have a lot of responsibilities and tasks to look after. Sometimes, you may not pay much attention to a few tasks like bookkeeping, and it falls behind. Most business owners overlook bookkeeping. However, sound bookkeeping is vital to running a business. Apart from all the benefits of bookkeeping, one of the most significant advantages is that it helps business owners to make timely decisions.
Some business owners think that the latest accounting software for bookkeeping would suit their company. Well, It could be helpful. But only if it is appropriately utilized. Otherwise, all the bookkeeping efforts would go in vain even after paying hefty amounts for the accounting software every month.
This article will talk about bookkeeping details and, most importantly, how you can clean up messy bookkeeping.
Signs of a Messy Bookkeeping
There are few common signs which would tell you if the bookkeeping is not going well. Some of them are:
- You wouldn’t know your spendings each month.
- You are not certain whether your business is profitable or not
- Your files are full of unorganized receipts
- The monthly reconciliations don’t happen.
How to Clean Up Messy Bookkeeping?
Cleaning up your messy bookkeeping is essential to run the business successfully. How can you do that? Let’s find out.
Determine the Problem and Fix It:
When you have decided to clean up the bookkeeping, you should first consider stopping any further damage from happening. You can do that by redirecting all the incoming source documents to the bookkeeper. This would help identify if there is an issue in the bookkeeping methods, and the bookkeepers could eliminate them. For instance, there could be issues in the general ledgers, asset overestimation, negative cash balances, etc. That’s why it is always a smart option to contact a reliable accounting firm for the bookkeeping service.
Separate Your Personal and Business Accounts
According to one of the researches, most small businesses and startups don’t do very well and fail because they don’t have separate personal and business accounts. There’s a lot of confusion when you don’t have individual accounts. For instance, looking for the right amount on your business books could be a daunting task as you wouldn’t be able to find it right away. And that’s what you have to do before filing tax returns.
Track Every Expense Incurred
That’s an essential part of keeping your bookkeeping organized. You have to develop a proper system of bookkeeping. Either download software or have a reliable accounting firm to manage your bookkeeping tasks. You have to make sure that you record all the transactions that are incurred for expenses.
Cleaning up messy bookkeeping is essential for any business. A few of the ways by which you can achieve that are listed above. However, if you are having difficulty doing that, you may contact the accounting firm. They will manage everything for you as they have professional bookkeepers.
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.