Do receipts, invoices, and credit card bills 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. They will also provide training in the software to get you up and running quickly. Soma recommends Sage Simply Accounting ™. You can even download your banking information directly into the software, a real time saver. 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 www.ipbc.ca right away and be sure to check their credentials.
2. File your paperwork -. Keep all original receipts, credit card statements and bank statements along with sales tax remittances and payroll deduction remittances for seven years. Consider purchasing a scanner. They come with software that allows you to sort the receipts into categories and store them electronically. 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. Don’t forget to back up your accounting data files. Give your accountant a copy of your accounting software file to prepare your income tax return.
4. Run Reports Regularly – Tracking your profits and losses using the right tool will help you analyze your financials monthly. At the end of each month, run an Income Statement and a Balance Sheet (collectively known as Financial Statements). The reports from the software will provide the guidance and tools need to move your business forward to the next level.
Dianne Mueller CPB – Certified Professional Bookkeeper
Soma Small Business Solutions