Staying on top of the numbers and getting a handle on your bookkeeping is vital to running a successful and healthy business.
Let’s face it– recording and organising financial data isn’t the most glamorous or exciting part of running a business (unless you really love numbers). But it’s super important to get it right.
We like to think of bookkeeping as the foundation of your business’s finances. It forms the basis for all of your financial reports, budgets, and cash flow forecasts.
With a proactive approach to bookkeeping, you can make better decisions for the future of your business and have peace of mind that you’re in control of your finances and not the other way around.
Here are our bookkeeping best practices to help you stay in control of your business.
Carve out the time to do your bookkeeping regularly
Start as you mean to go on and set out the time to do bookkeeping regularly.
Bookkeeping isn’t a one and done process, so it’s vital to regularly reconcile your accounts and fix any mistakes straight away.
When you fail to carve out time for your bookkeeping, problems quickly begin to snowball. As the work keeps piling up, the task becomes so taxing, you struggle to find the time for it... and the cycle continues!
What’s more, when you let the bookkeeping slide, it can become a major time-suck, impacting your financial reports and ultimately, the decisions you make about the future of your business.
Think of bookkeeping as regular maintenance of your business, rather than a once in a while big fix. To keep it manageable, make time to do your bookkeeping little and often. We recommend setting time aside weekly or monthly, depending on the volume of your transactions.
Know your deadlines
Keeping on top of tax deadlines removes the stress and hassle of last-minute bookkeeping and potential fines from filing late or making mistakes.
Do what you need to do to remember your tax deadlines, like putting an event in your calendar or a note on your phone. That way, you won’t have the stress of rushing to get the books done on time!
Budget for tax
As the old saying goes, two things in life are certain– death and taxes.
Although you might be making a healthy profit from your business, unfortunately not all of the money is yours. You’ll have to set some aside each year for tax payments.
Too many businesses get caught short because they withdraw all of their hard-earned cash from the business and forget to budget for tax payments.
That’s why we recommend creating a separate space in your bank account or opening another business savings account where you can put money aside for tax bills so you’re never caught off guard by an expected bill!
Use Dext and Xero to do the heavy lifting
With the right bookkeeping and accounting setup, you can work smarter not harder.
Gone are the days of keeping manual ledgers and piles of paper receipts.
Nowadays, accounting and bookkeeping software makes it easier than ever to stay on top of the numbers. And with the right setup, you can get your software working in tandem to do the heavy lifting for you.
Managing your expenses with Dext
Dext (formerly Receipt Bank) is an automated bookkeeping app designed to make your expenses simple and painless. You can capture, store, and keep track of your business receipts, bills, invoices and bank statements. Just submit your receipts, bills, and invoices via your Dext email or snap a photo of your receipt on the mobile app, and Dext will take care of the rest.
With Dext, you’re armed with the tools to start expensing more, paying less tax, and saving vital hours in your week. Say goodbye to those paper receipts and manual spreadsheets and wipe out tedious data entry for good.
Simple accounting with Xero
Think of your accounting solution as the core piece of software for your business. With Xero, you can automate everyday tasks, get up-to-date financials, and connect apps to help you manage just about any aspect of your business, from bills and expenses, to payments and payroll.
Even better? You can connect Dext with Xero to streamline your bookkeeping and accounting. Review and publish expenses to your accounting solution in one click, and say goodbye to paper receipts for good!
With everything running smoothly in the background, you can keep your focus where it should be– on building an amazing business.
Hire a good bookkeeper
If you have a large volume of transactions, or simply don’t have the time to manage the books yourself, it could be time to outsource a bookkeeper or hire one in-house. This ensures your books are always up-to-date and done to the highest standards.
A qualified bookkeeper can take care of the more complex bookkeeping tasks, freeing up your time to focus on the business. And since they’re a professional, they’ll probably be able to do the work in half the time you can! We recommend looking for a bookkeeper that’s proactive, tech-savvy, and knows your industry well.
Setting your business up for success
When it comes to running a successful business, keeping a handle on the numbers is an absolute must.
With a proactive approach to bookkeeping and the right software, you can lay the foundations for a healthy and profitable business and set yourself up for long-term success.