28 Jun Making cents of your bookkeeping
Are you a numbers person? If you are reading this post, then you might be saying in your head, “Nope! Not me!” If you aren’t good with the financial side of your business, it can be hard to make cents of it all. There are so many different things you need to know. It can feel a little like the Wizard of Oz, with all those numbers, rules and systems, oh my! Today we are going to give you helpful information so you can make cents of your bookkeeping and hopefully start to practice some good bookkeeping habits.
What about those reports anyways?
Even back in the stone age, most bookkeeping was still a practice of record keeping except it was done by hand. Nowadays, bookkeeping is done with online and cloud accounting programs such as Quickbooks, Freshbooks, among others. These programs all offer reports that you can reference to see how your business is doing financially — things like profit and loss statements, balance sheets, accounts receivable aging, and more.
Correctly inputting information
All of those reports are lovely, but they mean squat if the information isn’t put in correctly. Not sure how to do this? You can spend hours online reading, OR you can get in touch for some training, and we can go over all of these for you. You want to make sure you get this right the first time because if you spend an entire year or two or three inputting numbers that aren’t correct, well let’s just say you will definitely be paying someone like us tons more to fix the problem down the road.
Profit and growth and making plans
As the headline states, it’s all about cents. I doubt you want to give all your products and services away for free. To know where you are going, you need to know where you have been. Accurate financial records are the key to strategizing, making plans, and even marketing your business as well. There is nothing better for business building and strategy than to look at the numbers and is a practice you need to get into now if you aren’t already.
Let’s talk receipts and tax time
You need these for your taxes — bottom line. To prove to the CRA the expenses you incur as a business, you need to keep these for no less than seven years. Let’s make it eight just to be safe. Make sure you record all your data, and it’s even better if you do this monthly, so you know how many expenses your business has. If monthly is a stretch, the next best is quarterly. This way, you won’t end up with a box of receipts at the end of the year, and you will be able to manage your cash flow throughout the year better as well. Shameless self-plug, hiring a bookkeeper makes all your receipt stress float away.
What if you are audited?
Getting audited is a business owner’s worst nightmare, and we have helped out a few business owners in this predicament. If you aren’t following the rules, in the case of an audit, you are as they say in some parts of the world, “In deep doo-doo.” Be PRO-ACTIVE with your bookkeeping. Know the laws, know the rules, and follow them. And if you are still foggy on making cents of your bookkeeping and accounting and need more information, we are happy to chat!