The new year is upon us. Are your books a mess already?
Last month, I posted about how to get your books in order for the new year. If you haven’t taken the time to get set up, now is the time to do that.
But then what? So you have some file folders set up. How does that help you stay organized?
Keeping your books in order is not a one-and-done deal. It takes regular attention and time, even if you’ve hired a bookkeeper or accountant to help.
So what should you be doing on a regular basis to keep your books in order?
Businesses fail every day because the owners ignore what’s in (or not in) the bank. They’re not keeping tabs on the money flowing in and out of their business account. And they’re not charging enough for their products or services. Here’s how to get on the right track.
Decide on an accounting program.
With the help of your bookkeeper, decide which accounting program works best for your business. If you’re planning to keep your books yourself, be sure to talk to your accountant about which program would work best with your business’s tax situation. The less your accountant needs to do come tax time, the less expensive it will be for you.
Reconcile your bank statements.
Every month, your bank publishes a bank statement for each of your accounts. It is up to you to verify each transaction to ensure it is correct, and to determine if it’s a personal or business expense. (As an aside, you should only make business transactions with your business account and personal transactions with your personal account.) Sort each business expense into categories: professional development, taxes, rent, insurance, supplies, etc. I recommend doing this once a week by logging into your business account, but once a month is the minimum.
Review the cost of your products and services.
As a business owner, it’s up to you to make sure that your business is profitable. Prices on the supplies and services you need to conduct business will change from time to time. And when that happens, you should review your pricing structure to ensure you’re still profitable.
Make changes along the way.
There’s always room to refine and adjust your plan. Things happen in business and in life, and you have to be flexible to adjusting to these changes. Whether that means finding a new system for tracking your budget or bringing on additional staff to help grow your business, having a mind on the future and the needs of your business is key.
If you’re finding that developing a system for your business finances is a challenge, get in touch with me. I’m happy to take some of the stress away for you!
