How to make your bookkeeping quicker than ever before
You may think that I harp on a lot about the importance of bookkeeping because I’m a bookkeeper, but it’s so much more than that.
And I’d love for you to understand why I preach about bookkeeping…
Your books are the lifeline of your business. If they’re healthy, your business will keep running effortlessly like Forrest Gump. But if you start neglecting your books, your entire business can suffer.
Now I don’t want to alarm you, but a report by ASIC has shown that the number of small businesses who are failing is rising, and it’s not in their first year. In fact, 51% of small businesses don’t survive past 4 years.
They attribute business owners struggling with issues such as cash flow and record keeping to this statistic.
See – bookkeeping is super important!
My 6 ways to stay on top of your bookkeeping
1. Don’t treat your bookkeeping like your laundry
Bookkeeping is like doing the laundry. It’s something most of us don’t like doing, but if we ignore it too long, you’ll spend the whole weekend making your way through the pile. But, if you keep on top of it, you’ll have it done in next to no time, and you won’t have people yelling at you, ‘have you seen my …’.
TIP: When bookkeeping is done regularly, you’ll also remember what the payments were for, who to invoice etc. and you won’t miss the little things.
2. Check who owes you money and who owes you
Also known as checking your ‘aged debtors and payables’, it’s vital to know your money flow. The last thing you want to do is to answer awkward phone calls of people asking you where their money is. Or worse, having to make those calls asking others to pay you once you’ve realised you’ve run out of cash.
TIP: It’s harder to get money out of people the longer you leave it.
3. Get your head in the cloud
Cloud accounting is the bomb! Your bookkeeping is less manual, your data is more accurate, you can see first hand how you’re travelling, and you can stop a basic Excel spreadsheet. You can also integrate other online software, such as your CRM, with your accounting software. For example, you can enter a new client into your CRM and have it automatically create a record in your accounting software for invoicing.
TIP: If you send the same invoices to clients, you can use cloud accounting to set up recurring invoices. AND, there’s also ‘delayed charges’ where you can set up certain items to appear on each invoice, and then you can add the extra items to complete the invoice.
4. Know straightway what’s happening with your bank account
As a bookkeeper, I love bank feeds. You link your bank accounts directly to your accounting software, and it records EVERY transaction automatically. It’s a time-saving genius.
TIP: Automating your bank feed makes sure you don’t miss anything and improves the accuracy of your bookkeeping tenfold.
5. Modern shoe boxes
Programs such as ReceiptBank or Hubdock are like shoeboxes on steroids. You dump all your receipts and invoices in, but unlike a lifeless cardboard box, these programs read them, extract the data and feeds it into your accounting software. It saves you so much time and makes bookkeeping so much easier.
TIP: Electronically storing your receipts is one of the best ways to make sure you stay compliant with the ATO.
6. Learn how to read (and love) your numbers
If you’re a whizz at using your accounting software, your next step is to learn how to create reports that you want to see for your business. By customising reports, you can make sure you see what you want, rather than wasting time scrolling through general reports. For example, you could have codes set up to break down your sales by location or revenue stream (such as coaching calls, workshops, large corporates etc.).
TIP: Customised reports allow you to see immediately where you’re making money with sales, or where your expenses are a little high.
So, how do you feel about your bookkeeping?
So, are you a gun at keeping your books in order? Or are you still pushing it down your to-do list like dirty laundry? And although there are loads of people out there who’ll pretend they are superhumans who run their business all by themselves, the truth is, we all need help.
All the small businesses who are thriving know that outsourcing is the key. They handball the chores that they don’t love and focus on the parts of their business they’re passionate about.
Think of up-to-date books like your business buoy – they keep you afloat, and without it, you could drown.
Over to you
If you’ve got any extra tips you can share about your bookkeeping, please feel free to pop them in the comments. With small business bookkeeping being so important, any support and advice we can share are great!
Please feel free to share this with your networks, or with anyone who may be looking for advice on their bookkeeping.