How To Keep Your Business Finances In Order Throughout The Year
Are you tired of the year-end scramble to get your business finances in order? Want to avoid the stress of sorting through a year’s worth of receipts and transactions? In this article, we’ll show you how to keep your business finances organised and up to date throughout the year, making tax season a breeze.
Managing your finances is a crucial aspect of running a successful business. It’s not just about meeting tax obligations; it’s about understanding your financial health, making informed decisions, and planning for the future. To achieve this, you need a systematic approach that keeps your finances in order year-round.
Let’s get into it…
Decide on an Accounting System
The first step to maintaining financial orderliness is to choose an accounting system that suits your business needs.
➡️ Spreadsheet or Accounting Software
Decide whether you’ll use a spreadsheet or online accounting software. Both options have their merits, but choosing one consistent method will prevent confusion and streamline your financial record-keeping. If you’re unsure which option is right for you, check out our in-depth guide on spreadsheet vs. accounting software.
Choose a Filing System
Gone are the days of scattered records across multiple platforms. Establishing a unified filing system for your financial documents is essential. Here are some options to consider:
➡️ Cloud Storage
Cloud storage solutions, like Google Drive or Dropbox, allow you to store and access your financial documents securely from anywhere. You can create organised folders and subfolders to categorise your records.
➡️ Dedicated Accounting Software
Many accounting software platforms come with integrated document management features. Storing your records within your accounting software ensures they’re readily available when you need them.
Book Regular Dates in Your Calendar
Avoid the chaos of sporadic bookkeeping by scheduling regular dates in your calendar for financial management. The frequency of these sessions depends on your business’s transaction volume. Here are some tips:
➡️ Weekly Check-Ins
For businesses with high transaction volumes, consider a weekly financial check-in. This allows you to stay on top of things and catch any discrepancies early.
➡️ Monthly Reviews
Monthly reviews work well for businesses with moderate transaction volumes. It provides a balance between regular updates and flexibility.
➡️ Quarterly Updates
If your business has relatively low transaction volumes, quarterly updates may suffice. However, be diligent about sticking to this schedule.
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Automation can be your best friend in maintaining organised finances. Here’s how to leverage automation effectively:
➡️ Email Rules
Set up email rules to categorise regular bills, making them readily available when it’s time to update your records. This reduces the time spent manually sorting through emails.
➡️ Accounting Software Automation
If you’re using accounting software like Xero, take advantage of automation features. Set up rules for categorising transactions, reconciling bank statements, and generating recurring invoices.
➡️ Document Processing Software
Consider using document processing software, such as Hubdoc or AutoEntry. These tools can automatically extract and categorise data from your receipts and invoices, saving you valuable time.
Consider Hiring a Bookkeeper
If your schedule is overflowing, and managing your finances becomes overwhelming, hiring a bookkeeper can be an ideal solution. A professional bookkeeper can help you stay on top of your finances, ensuring everything is in order and compliant with regulations.
Keeping your business finances in order throughout the year is essential for your financial health and peace of mind. With the right systems, processes, and discipline, you can maintain organised finances and make well-informed decisions to drive your business’s success. Start implementing these strategies today and reap the benefits of financial clarity and efficiency.
At Joanna Bookkeeping, there are many ways we support people just like you with business finances (and more). If you want to avoid getting stuck in red tape and make sure everything is done correctly from day one and beyond, then let’s have a chat. Book a call with our Oxford accountant to see how we can help.
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