Accounting and tax preparation are tasks solopreneurs rarely enjoy tackling, but they are necessary parts of running a business. Good financial management is the foundation for a thriving business, but it can be overly time-consuming, particularly for solo managers who have to handle all aspects of running the business themselves. No matter what shape your bookkeeping is currently in, there are always ways to improve, streamline, and organize for a more efficient and cost-effective bookkeeping system. Short on time as it is? Consider five tips to improve accuracy and enhance efficiency that won’t take any (or much) more time than you already spend and can alleviate some unneeded stress.
Five tips that won’t take additional time upfront, but can save time and stress later.
If you are running your own business, you likely have at least one checking account. If your solo business was once a side gig that you’ve since gone full-time with, you may still be using a personal account to flow business money through. Opening a designated checking account for your business does not take much time (and can sometimes be opened online) but it will save you countless hours later on expense tracking and account reconciling. Keeping your business funds isolated from your personal funds means that all deposits, payments, and withdrawals are always used for business purposes, and a complete record of your yearly business revenue and spending is on-hand for when you need to start compiling tax records. Tax preparation will take far less time and be more accurate so that you can get every deduction to which your business is entitled.
Good financial management requires your bills are paid promptly in order to maintain good relationships with vendors, suppliers, contractors, and landlords. While it is a good habit to set aside some designated time each week or every other week to settle up all bills, it only works if you stick to the schedule. If other business needs come up, you may find that bookkeeping and bill paying are the things most likely to be put off for higher priority concerns. It then becomes easy to forget about your bills altogether or remember them when they are already past due. If you don’t have the time or discipline to stick to a set bill-paying schedule, make it a habit to pay them when they come in and reduce the likelihood of incurring late fees for neglected and overdue bills. It won’t take any additional time and can save you wasted dollars in the long run. An online check printing service allows you to create checks on demand and have them mailed directly that same day. It is the most time-efficient way to send a payment when a paper check is the preferred method.
Another time-consuming aspect of managing your finances is not only issuing the invoices to your clients, but chasing down those that remain unpaid. Automated services that send out invoices for you and follow up with gentle reminders will save a ton of time and hassle. They also are more likely to get the money to you faster. Making invoices as detailed as possible with dates, descriptions, and itemized pricing helps reduce the number of clients who take a long time to pay because they cannot recall the exact services or fees.
Technology offers innumerable tools that can cut costs, save time, and improve accuracy in financial management. If you’re short on time as it is, you are not likely to sit down to learn a complicated accounting system to replace your simple ledger or spreadsheet. Cloud technology eliminates the cumbersome accounting processes of the past and allows the busy business owner to simplify the books while benefitting from 24/7 access to fully-updated accounts. Basic cloud accounting software is offered at very low cost and offers time-saving features like expense tracking, mileage tracking, receipt uploading, and payment management. Checkeeper’s online check printing and mailing service works compatibly with the most widely-used online accounting and payroll management systems on the market for even greater time savings and automatic syncing of payment data in real-time.
As your business grows, you may find it helpful to reach out to a tax professional. If you are still in the DIY stage where you manage the finances and compute the taxes on your own, software that organizes your financial data can be a real help in saving time and reducing stress. It is always advisable to put some extra money aside to meet any potential tax burden when the time comes. Having some money set aside gives you a financial cushion so that your tax liability does not create an unexpected shock or crisis.