Are your businesses finances disorganized? Does your paperwork keep you up at night?
Do receipts, invoices, credit card bills, and financial statements take up space on your desk and in your mind?
There is a way to organize your business finances. By creating a simple, yet functional way to organize your business you will find it easy to sleep at night and increase your creative flow.
1. Purchase Accounting Software –You will want to talk to a consultant that can perform a needs based analysis on your business and help you purchase the right software for your needs. An accounting software consultant will be able to advise you on the ability to upgrade when your business is ready for a more robust system. You also want to be sure you are tracking your profits and losses using the right tools and analyze your financials monthly.
Soma recommends Simply Accounting ™, but there are others. Try to begin tracking sales and expenses from the beginning of your business, don’t let it get behind! If you do not want to do the bookkeeping, hire a Professional Bookkeeper right away and be sure to check their credentials. One of the largest bookkeeping associations in Canada is at www.ipbc.com. (Institute of Professional Bookkeeping of Canada).
2. File your paperwork -. Keep all receipts, credit card statements and bank statements (make sure to reconcile these monthly), sales tax remittance and payroll deduction remittance for seven years. At the end of each month, run a Profit and Loss Statement and a Balance Sheet (collectively known as Financial Statements). The Financial Statements become the separator for each month. Consider purchasing a scanner. They come with software that allows you to sort the receipts into categories. You will never have to dig thru paper files again.
3. Close each year – At the end of each year, reconcile all your accounts, print/scan your annual Financial Statements, and close out your year. Give your accountant a copy of your accounting software file to prepare your income tax return.
Dianne Mueller CPB – Certified Professional Bookkeeper
Soma Small Business Solutions