Bookkeeping is no business owner’s favorite job, but it’s necessary to keep your company in the green with your investors and the IRS. However, hitting the books doesn’t have to feel like hitting the pavement. Here are five ways you can simplify your business accounting processes.
Nix the reimbursements and expense reports
The most time-consuming part of the bookkeeping process is tallying expense reports and reimbursements. Using an expense management software provider and virtual card specialist, such as Divvy, optimizes this process by eliminating your reimbursement model altogether.
Virtual cards are single-use 16-digit card numbers that protect your financial information and allow you to delegate spending authority to employees as necessary. That means that when the end of your fiscal year approaches, there’s no need to round up all of your expensive tracking reports and dole out reimbursements. All of your expense tracking happens in one central location without the need to compromise your permanent financial information.
Keep personal and business spending separate
A problem some small businesses encounter at tax time is organizing expenditures between the personal and business categories. Tracking personal finances should fall under a separate task from your business bookkeeping.
To make less of a mess for yourself when it’s time to organize your records, manage individual storage spaces for business and personal spending. Consider using a separate bank account for each, and file your receipts and spending reports in individual folders or computer drives.
By maintaining a division between your personal and business spending, you’ll save time and energy later.
Everything from invoicing to payroll automation improves bookkeeping processes. Reducing the number of steps and third parties involved in these procedures condenses all the paperwork required to process payments.
Automation allows you to track incoming and outgoing documents and finances. What’s more? It provides regular reports, which can be filed and calculated during bookkeeping.
Automation is like any other tool. There is a right and wrong way to automate. Customer service, for example, is possibly better left to the humans, but invoicing and ordering via automation saves time and money.
Set aside weekly time for business accounting
Waiting until the end of the year to organize and juggle reports is a terrible idea. Not only will it leave you feeling overwhelmed, but it also provides plenty of room for errors throughout the year.
Setting aside a thirty-minute window once a week to go over financial reports and bookkeeping ensures you’re on task and in the know when tax season rolls around. This early preparation also guarantees you know what’s going on in your company and where strategy changes are needed.
Call a professional
Using a professional business accounting service isn’t giving up. Many companies call in a professional service to get organized and train employees. Receiving updated training on business accounting processes and bookkeeping will dramatically improve your procedures.
Whether you choose to partner with an accounting firm full-time or simply call in a pro as needed, it’s one resource you should consider.
Staying organized, taking advantage of digital tools, and investing in virtual cards are great ways to get ahead in business accounting and bookkeeping. If you’re still confused about the best ways to track and report spending, the IRS has excellent resources for new business owners.