As a small business owner, the idea of hiring a bookkeeper may sound like an additional expense, but in the long run, having a bookkeeping professional can save you from any business disaster. A savvy business owner embraces good practices to ensure that the business grows steadily. Here are five habits that can give your business a strong foundation:
Map out a bookkeeping system
If you want to get the right results, you need to put a proper bookkeeping system in place. Any business, regardless of the size cannot afford to be poor at bookkeeping because it eventually creates a snowball effect. You may think that your financial health is still great and you decide to grow your business, but when banks and investors try to check your financial reports, it clearly shows that business expansion is far from happening. Be keen on choosing bookkeeping software. Do not be tempted to purchase software loaded with features if they cannot meet your business needs.
Create financial reports
Reports such as balance sheet, cash flow and profit and loss are all important in repositioning your business. This is why if you have a bookkeeping system that regularly updates and reconciles, you will no longer have to create routine reports. Financial reports are going to be crucial to the decision-making process. If you do not get accurate reports, the decision you make can have a long term effect on your business.
Keep your receipts
When you throw away receipts for the items you purchased, it is easy to lose track of your expenses. You may not realise the impact of not keeping all receipts until you decide to pay your bills as your cashflow is already suffering. Make it a habit to keep and file receipts correctly. This way, you will know the amount you are spending for your business. Books may not balance out if you failed to keep a record of these expenses.
Communicate with your bookkeeper
Hiring a bookkeeper does not mean you should go completely hands-off. It is still important to keep an eye on your bookkeeper so you will know if books are regularly maintained. If you leave everything to your bookkeeper, you will never know if there are any discrepancies or fraudulent activities. You still need to check if your financial reports are regularly updated. Communicating with your bookkeeper will also help you make sound decisions by giving you an overview of your financial health and business performance.