If bookkeeping is not your favorite thing, you may have a tendency to put it off to the last minute, neglect it for months at a time, or cut corners to get it done quickly. Your time is undoubtedly better spent elsewhere. But sloppy financial management creates costly problems down the road and can cause you to miss growth opportunities. How do you know if your bookkeeping system needs an overhaul? Some clues it might be time for a better system:
Failing to pay your bills on time is bad business. Not only do late payments incur costly late fees that add up, but habitual lateness lowers your reputation with vendors and can ultimately impact your credit. If you’re cutting it close every month on your obligations or having trouble remembering and honoring all the different due dates, a more organized system is a must.
Storing and organizing receipts is a pain. But it is also necessary for keeping track of your purchases and expenses, as well as for calculating and documenting tax-deductible business expenses. A good bookkeeping system gathers all your receipts and categorizes them as you go so that tax preparation is simple. Online bookkeeping tools that allow you to scan or take a pic of receipts for easy uploading mean no papers, folders, or filing cabinets are needed for easy receipt organization.
Reconciling your accounts may not seem important all the time, especially if you only had a few financial transactions that month, but account oversights can lead to big problems later. Taking the time to make sure your checking account and credit card statements match your books is important for keeping accurate tabs on your available cash flow so that you don’t overextend. A good bookkeeping system is one that syncs data from multiple sources so that each transaction needs to be entered only once for you numbers to remain up-to-date.
While you’re out providing services to clients, selling your products, acquiring new customers, or marketing your business, you don’t have time to chase down every invoice. But the continued success of your business depends upon a predictable and reliable stream of revenue. Automated invoicing programs not only send out invoices for you but can automatically follow up with reminders and alert you to outstanding balances that are past due.
Payroll is one of the most time-consuming financial tasks of a growing business with employees; it is also one of the most important in terms of accuracy. If your company is growing and taking on more employees, an affordable online payroll system might be a smart adoption. Cloud-based payroll systems offer low-cost payroll management and payroll tax calculation that streamline the process for you. Online check-printing services that work compatibly with payroll management software allow you to print and mail paychecks on demand for those employees who still receive paper checks.
Bank fees, late fees, convenience fees, tax penalties, unauthorized charges all add up to the same thing: you’re losing money and getting nothing for it. When the books are disorganized, unexplained charges can accrue and can go on for months and months before being noticed and rectified. If money is going out the door and you’re not sure where or why, a better bookkeeping system is in order.
Some business owners who are not confident in their bookkeeping skills and need a upgrade find that hiring a virtual bookkeeper—someone who is paid on a contract or hourly basis to manage your financial records remotely—is a cost-effective alternative to a full-time hire. If you are confident in your bookkeeping skills but just don’t seem to have a good system or enough time, cloud-based financial services can be a very affordable way to overhaul your bookkeeping system while still keeping it all in-house. Online tools for small businesses take a lot of the time and hassle out of manual entry bookkeeping by updating and syncing data in real time across all channels so that account reconciling and tax preparation are much simpler. They also help you track your expenses as well as your paid and unpaid invoices so that you can stay on budget and make better, data-driven decisions about the financial direction of your company. Online check printing and mailing services work compatibly with online accounting and payroll software so that check payments can be printed and/or mailed on demand and recorded in an easily-searched registry that is in sync with your other transactions. If you do opt for a virtual bookkeeper down the road, cloud-based services are universally accessible so that you can share financial data with your assistant remotely and still have accurate, up-to-date books.