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. Use Accounting Software –You will want to talk to a consultant that can perform a needs based analysis of your business and help you choose the right software for your needs. Does a desktop program work best for your company or are you on the move and would need an on-line internet based package (Software as a Service). The price ranges from free to a few thousand dollars for most small business applications. 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 to be able to analyze your financials monthly.
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 www.ipbc.ca right away and be sure to check their credentials.
2. File/Scan your paperwork – Keep all receipts, credit card statements and bank statements, sales tax remittance and payroll deduction remittances for seven years. Consider purchasing a scanner. They come with software that allows you to sort the receipts into categories. Scanning your receipts allows you to store them electronically thus producing and storing a lot less paper. You will never have to dig thru paper files again.
3. Run Reports – At the end of each month, run an Income Statement and a Balance Sheet These Financial Statements become the separator for each month and provide the information on the expenses that you incurred to make the sales for that accounting period.
4. Close each year – At the end of each year, reconcile all your accounts, print/scan your annual Financial Statements, and close out your year. Provide your accountant a copy or access to your accounting software file so they may prepare your income tax return.
Nigh tee Night
Dianne Mueller CPB – Certified Professional Bookkeeper
Soma Small Business Solutions