When it comes to keeping track of financial transactions to a T, bookkeeping is how one can do so in a systematic and organized manner. After all, bookkeeping offers exactly that— a detailed approach to monitoring and recording financial activities so that finance tracking becomes transparent, methodological, and efficient.
Whether you’re an old hand at this and are simply looking for a simpler bookkeeping technique, or are a beginner wanting to learn how to go about it, here are basic yet essential tips from https://rooks.co/bookkeeping/ for easy bookkeeping.
Bookkeeping for Beginners
Personal Banking Vs. Business Banking
The first practical step towards self/ small-business bookkeeping is to separate your personal from your business bank accounts. Your business funds are to be completely independent of your individual funds, and vice versa.
This will not only save you on time, sifting through which dealings are linked to your business and which ones, to your own, but it will also add to general convenience. Remember that in business bookkeeping, if your personal expenditures are somehow in the mix, even those will have to be singled out and calculated. That’s an unnecessary effort you can do away with.
Business Savings Account
If you haven’t set one up yet, now’s the perfect time to open a business savings account. Here’s something that should be treated autonomously from your profit as a whole. Typically speaking, profit is divided up into portions for utilities, maintenance, and other business expenditures.
That said, having a business savings account will allow you to have a reserve for emergency use. Not many small ventures take this into consideration, especially if the revenue stream isn’t stable during the first few months to a year. Still, it’s a good practice to have and to get used to.
According to experts, the right percentage to immediately set aside from your income should fall in the 25 to 30% range. Some automatically deduct the amount from every transaction while others wait until after they close shop. This part will be up to your preference.
As a side note, online banks account will prove helpful and efficient so that money wiring will be seamless by being a click away. You’ll discover that if you rely on a bookkeeping software and manage your bank account online, posting statements, making deposits, transfers, and payments, and writing cheques will be almost effortless.
A Suitable Bookkeeping Software
We’ve brushed on the topic briefly in #3 but we’ll give you a bit of an insight into why this is crucial. Having a bookkeeping software suitable for your business needs is as important as the practice of bookkeeping itself.
There are specific functions these programs work best for. Regarding this, it will be to your advantage to know exactly what main functions you want the software to achieve. Invoicing, tracking, reporting, chart production, and the like.
Another tip from professional bookkeepers is a non-negotiable, and it’s a cashbook. Having one, even only through the form of Excel, is a must. When the business picks up and begins to grow, it’ll be wise to upgrade your software as well, so that it will include features such as ledgers, inventory, point of sale, cashbooks (with enhanced features), bank reconciliations, accounts receivables, etc.