7 Keys To Getting Your Small Business Accounting Under Control

Do you need to get your small business accounting and bookkeeping under control but you just don’t know how to get started? You’re not alone. Most small business owners struggle when it comes to their small business finances.

Here are 7 keys to getting your small business accounting under control. I’ll mention each one briefly and then provide more details in future posts.

1. Separate personal income and expenses from business income and expenses

Many small business owners don’t track business income and expenses separately from their personal finances. Separating them will make it much easier to stay on top of your business. Also, the IRS also requires you keep things separate.

2. Use small business accounting software

You don’t have to use a shoebox or spreadsheets any more. There are many choices available for paid and free online small business accounting software. They are easy to use and you’ll be amazed at how easy it will be to get your taxes done once your accounting and bookkeeping are up-to-date.

3. Download transactions from your financial institution

Once you use small business accounting software, downloading transactions from your bank, credit card, and Pay Pal is a breeze. You can download transactions in as few as 5 minutes a day and save lots of time.

4. Schedule time on your calendar to work on your small business finances

The easiest and least painful way to get your accounting and bookkeeping done is to schedule time to work on it. I found that even 5 minute increments are better than letting it accumulate over 3 months. You should schedule time daily, weekly, and monthly. Then give yourself a reward when you finish.

5. Reconcile accounts on a monthly basis

“Reconciling” is the process used to ensure that all transactions on your bank and credit card statements are reflected on your small business accounting software. Reconciling accounts is the only way for you to know that you have recorded all income and expenses on your small business accounting software. Even if you download transactions you should reconcile your bank, credit card, and PayPal accounts. Reconciling will help you catch mistakes you and the bank/credit card company have made.

6. Review key reports each month

You can get a lot of very useful reports from your small business accounting software that you can use to help you run your business. Once you finish your accounting, bookkeeping, and reconciling for the month, you should review key reports like the Profit & Loss report.

7. Get expert help

If accounting and bookkeeping are just not your thing, then get expert help. I found that for my own business that I freed up a lot of time and mental energy once I hired a bookkeeper to assist me.

Put these 7 keys to work and you too can start getting your small business finances under control. What areas of accounting do you have trouble with? Leave a comment and let me know. I’ll address them in future posts.