fbpx

Healthy Bookkeeping Practices Every Small Business Owner Should Adopt

An image of a small business bookkeeper reviewing her client records.

Do you find bookkeeping synonymous with monotony, overwhelming paperwork, and repetitive report-making? We hear you. Boring as it is, bookkeeping cannot be ignored. Documenting, sorting, and organizing all financial transactions of your small business, including recording every purchase or sale made and filing away every bill and receipt – is a work that requires undivided attention and regularity. After all, bookkeeping practices are the first step to accounting and an essential pillar of your small business empire.

But we have some good news for you: unlike the pre-computer days (or even the early days of the digital era), bookkeeping need not be as tedious and frustrating as it used to be. With the advent of specialized technology for many business tasks, bookkeeping and accountancy have also become much quicker and easier to tackle.

We have five easy bookkeeping practices that you, as a small business owner, can implement right away to drive away your bookkeeping blues.

Five Bookkeeping Practices You Need Now

If you haven’t transitioned to the modern way of digital bookkeeping, it’s time to take the leap of faith. Apart from embracing technology, you must imbibe a couple of other habits to ensure your small business has a great bookkeeping system in place. Let’s take a look at them:

Using Tech to Stay Ahead

You can start by dumping your old physical bookkeeping methods for more advanced, fast, and secure bookkeeping software. Software and applications that cater exclusively to the bookkeeping needs of businesses are available. From tracking expenses and payments, extracting data from scanned documents using Optical Character Recognition (OCR), compiling spreadsheets, automatically sending invoices (with reminders), and even paying employee salaries, such software can reduce your workload by a considerable amount just by automating recurring vital tasks. Moreover, they can be integrated with your existing bookkeeping system.

And if that wasn’t enough, it could happen on the cloud without taking up any extra space on your office premises. You also have the option to give employees access to the records in any part of the world. Thanks to the latest encryption technology, your records also get the best security possible and ample backup, so you need not worry about losing your records to any calamity.

The best news is that the Canada Revenue Agency (CRA) now accepts financial details in digital form! This will ultimately save you and the CRA a lot of physical paperwork and storage space.

Expense Management

Be it on the personal front or business front, the adage that a penny saved is a penny earned holds true. Thus, controlling your expenses is the first step to creating more growth and investment opportunities for your business. You need a strong expense management system that can effectively track and manage the “how much, where, and why” of all your business expenses. Syncing and reviewing your budgeting and expense policies ensures your system works properly. A professional bookkeeper can set up the expense management system, conduct regular software audits, and analyze the data to highlight areas to reduce costs and thus optimize your financial resources.

Employee Training

Technology can improve your bookkeeping system. However, installing new software and quick, accessible applications won’t work if your employees don’t know how to use them. Employees should be given proper training on logging in, uploading, and sharing documents. At the same time, they should understand why entering all relevant details into the system is necessary. Apart from the technology angle, you, as the owner, should ensure your bookkeeping team is up-to-date with the latest bookkeeping standards and legal requirements. Compliance is of utmost importance in matters of accounting. Any negligence in bookkeeping tasks could snowball into a significant financial or taxation problem later on. Hence, a good practice is to get it right from the start.

Regular Reconciliation

Recording financial information is a part of the bookkeeping process. But another equally important part is reconciliation. Reconciliation involves double-checking and cross-checking all the various aspects of your bookkeeping system – bank statements, expense sheets, credit card statements – to ensure they all tally with each other and there are no gaps in your business’s financial records. Reconciling your books of accounts frequently is a great way to avoid or discern any involuntary errors, discrepancies, or fraud. This gives you time to rectify any mistakes or nip any potential scam in the bud without further damage to your business and brand name.

Reviewing for Scalability

Routine reconciliations and reviews of bookkeeping processes are, of course, a must for all businesses. However, when it comes to small businesses, a significant factor that needs to be kept in mind is the scope for scalability. Like every small business owner, you want your business to grow globally. So, ensuring your bookkeeping system and software are flexible and well-equipped to handle such large volumes is prudent. Remember, shifting to other advanced systems or technologies later would take much more time and effort to sync or reconcile with your earlier systems. Instead, opting for one that can adapt to the growing scope of your business and reviewing or tweaking it at regular intervals to better suit your expanding business horizons would be a better idea.

That is also why consulting a bookkeeping expert right at the beginning rather than on the verge of expansion would benefit your business interests. Each business is unique, and so are its requirements.

Contact Edelkoort Smethurst CPAs LLP in Burlington to Help You with Bookkeeping Practices

From scalability, compliance, technology, and management – a specialist can guide you to the best possible bookkeeping solutions for your small business and even customize them to better suit your requirements for the long haul. At Edelkoort Smethurst CPAs LLP, our accountants and bookkeepers can provide services such as setting up bookkeeping and accounting systems and preparing books of accounts. To learn more about how Edelkoort Smethurst CPAs LLP can provide you with the best accounting and bookkeeping expertise, contact us online or by telephone at 905-517-2297.