If you've captured and organized your invoices and receipts digitally, this is an easy task to stay on top of. Do it regularly or insist that your bookkeeper do so. Missing an error in your checking account could lead you to lose track of the actual funds you have available.
An error in inputting a receipt might cause you to take a bigger deduction on your taxes than you are entitled to and leave you open to fines and penalties. If you accidentally added a zero to an invoice when entering it, you might think you've got more money coming in than you do. It's important because it will help find errors, both large and small. While it's rarely difficult, it's tedious and sometimes even intimidating. Whatever you enter into your accounts should be checked. Not reviewing your books and accountsĮntering your invoices, receipts and checks into your books is a job only half done. This will help them record each amount in the proper accounts and allocate to the right people (inside or outside your organization). That accountant will love when signed time cards and contractor invoices have been captured and saved in a single digital repository like Neat. The solution: You could read the IRS website thoroughly, but that might make for sleepless nights. Contractors are responsible for their own taxes, but what you pay them must be recorded and reported to them as well as the IRS. For employees, you must withhold federal income taxes and remit them to the IRS. It's important to accurately record your relationship with them, for both your tax status and theirs. Improperly classifying people who work for youĪs a small business owner, you may have to hire people as temporary help - either for a brief and finite period, or part-time on a continuing basis. Capturing financial documents and storing them in the cloud or in remote digital storage means you will have the data you need and the supporting documents behind that data - this will also make it easier to recover should a disaster happen. If your books are in computer files or spreadsheets, always make a backup copy to an external hard drive, thumb drive, or cloud-based platform. If your business is small and simple, printing or copying vital records and keeping them off-site is clunky but workable. Anything that you have one copy of could disappear forever. If your books are kept in a spreadsheet, your hard drive could crash, your laptop could be stolen or lost or you could accidentally delete vital data. If you keep your books physically, those files and receipts are subject to damage from fire, floods, coffee stains or being misplaced. Related: Finding the Right Solution for Your Bookkeeping Needs 4. With the actual data automatically captured for your tax accountant or bookkeeping program, there's little risk of transcription errors and an increased likelihood that you have what you need. To keep it all organized and save space, take advantage of solutions that let you capture and organize digital versions of your financial documents simply and effectively. If you're being audited, you will need to produce receipts for all expenses, no matter the size. This strategy is less helpful when it comes to bookkeeping. Errors of size or importanceįittingly, small business owners often focus on the big stuff - the most important things to keep the business moving forward.
#Basic small business bookkeeping software
Whether you hire a bookkeeper whose sole responsibility is to properly record your income and expenses or use software to quickly capture and organize receipts and financial documents, you are saving time that could be used better. Mark it on your calendar and keep the appointment. The solutions: Find a way to make bookkeeping a habit. That's a recipe for disaster - deadline pressure only makes a costly error more likely.
When you keep putting your bookkeeping tasks off to the side for later, you're eventually faced with a mountain of receipts to work through.
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