One of less thrilling tasks in your diary this month maybe your book keeping, it’s not always fun or exciting buts it’s vitally important that you keep your finances in check when running any business. It’s often found that the best methods of book keeping are the new ones, regardless of which software you have its important that you utilise your financial software effectively to optimise your time and resources. An effective system and process can easily reduce the strain of book keeping.
If you are a one man business or a couple of entrepreneurs you may not be aware of the advantages of financial software, whenever undertaking the task of book keeping its important to remember that human errors will happen. It’s one of those inevitable things when dealing with large quantities of data, especially when tiredness creeps in and you’ve had enough of trying to balance the books. If you want to get things right it’s important that you double check any work submitted shortly after completion.
A respectable software system could help you reduce the amount of time you spend fixing errors, as well as the overall time you spend on the books. Many businesses try to trade without the use of a help of financial system, often it turns bad and businesses find themselves having to spend man long hours trying to find documents and figures from thin air. Investing in cloud software should never be a rash decision, considering the benefits like focusing on sales instead of book keeping, which has become a key motivational factor for many businesses and entrepreneurs.
By simplifying the number crunching process in this way, you might not need to hire that part accountant! If you are the one that is going to tackle the books this month then here are a few best practise tips to follow when it’s time to look over your accounts:
Someone once told me that it’s easier to spend a little bit of time every day updating your books than spending a whole day scratching your head and being stressed at the end of the month. Although at first it can be a chore, you get soon get into a routine and you will be thankful for not having a major backlog to deal with every so often. It’s advisable to also spend a bit of time each day recording in and outgoings, this will help you keep all the information you need organised so you are not tracking receipts down every weeks.
One of the biggest mistakes a new business can make is to keep its receipts, invoices and payments all in the same folder. Then at the end of the week you check them off on your statement to see if any outstanding payments remain. It should then be easy to calculate your profit margins and overheads, without working out why you have money left in your accounts.
If you have the capability to do so try and back up your account files every day or after use, cloud based software does this automatically. If you are backing up data on a physical format like a memory sick ensure you store it in a locked box or safe when not in use. It’s important to have a secure process in place to protect the sensitive information you have stored on your accounts. If you want to dispose of any back up material ensure the disk/stick is completely wiped clean or destroyed before passing it on or throwing it away. Most modern financial accounting software systems will automatically back up your data on a secure hosted server.
It may take up a little bit of time but most business do not got through their automated systems to ensure data entries are correct and or error fee. Sometimes you may find that you have missed a vital piece of information, automated systems are now very good at highlighting errors that have crept in but are not great at highlighting missing data.
A great little short cut to help you with your book keeping is to add categories to your books, this way you can easily track which payments are overheads and whether an ingoing is from a client or a tax refund for example.
I hope the above tips will now help you be more organised on and off cloud accounting software as well as highlighting the software to new businesses and entrepreneurs. Reducing the time spent book keeping will hopefully make any business more focussed on goal achievement and profits.