Here are four great practices you should consider establishing for yourself in the discipline of bookkeeping. This will help to ensure that you provide the service your business needs while evaluating the health of your business.
- Make a firm commitment to do your bookkeeping in a timely and consistent manner. Consider depositing receipts daily, paying invoices weekly and completing other bookkeeping events at least monthly.
- Record your sales and expenses appropriately based on if you are running a “cash” or “accrual” basis business. Simply put, if you are “owed” or “owing” money, you should be on an “accrual” basis.
- Keep track of your taxes (payroll, sales and income). A detailed reporting system for payroll and sales will help you make timely tax payments, helping you to avoid costly penalties and fines.
- Finally, good business records help you measure your business’s performance by comparing your year over year performances. Become familiar with and review your financial reports (profit and loss statement, balance sheet, cash flow, etc.) on a regular basis.