Chaliff CPA Blog

5 Tips for Smart Small Business Bookkeeping

Written by Gregory Chaliff | Dec 9, 2022 5:48:00 PM

The bookkeeping tasks associated with running a small business can quickly become overwhelming. 

In fact, if you ask many small business owners what tasks they dread the most about running their company, you’re likely to hear something about bookkeeping.

But keeping accurate records of financial transactions doesn’t have to be something you dread! Using these 5 small business bookkeeping tips will simplify your bookkeeping processes and make your small business run more smoothly.

SEPARATE YOUR PERSONAL AND BUSINESS EXPENSES

Did you know 5% of Americans work for companies that have between 1 and 4 employees? Or that another 12.6% work at small businesses that have between 5 and 10 employees?

When businesses are small, it can be especially tempting for business owners and managers to keep all of their financial records together. When business and personal expenses are intermingled, there are far more opportunities for mix-ups, confusion, and inaccuracies. 

Here’s an example we see quite often: some small business owners use the same credit card for personal and business expenses. This practice increases the risk of errors and can get confusing. Plus, paying for everything from a shared account creates more work for the person doing your bookkeeping– even if that person is you!

KEEP (AND ORGANIZE) YOUR RECEIPTS

Bookkeeping software doesn’t require receipts to keep track of business transactions and expenses. However, the IRS requires receipts for tax deductions.

Of all the standard small business bookkeeping tips out there, “keep your receipts” is a pretty standard piece of advice. That said, there’s an important part that gets left out: you have to keep those receipts organized! 

Though keeping paper receipts used to work well, today’s purchases are often made online or through a paperless transaction. We recommend using a combination of software programs to manage your digital and paper receipts. 

Pro tip: A paper receipt scanning program will turn all of your paper receipts into digital ones and help you sort and store all of your transaction data. 


Related: How Can A CPA Help Your Small Business?

STAY UP TO DATE ON ACCOUNTS RECEIVABLE

Keep your cash flow active by monitoring your accounts receivable on a regular basis. Accounts receivable is not a “set it and forget it” situation!

When there is always work to be done, it can be way too easy to send out invoices and get distracted by other tasks. Sometimes, the day-to-day operations of your business end up superceding the follow-up work necessary to keep your accounts receivable running smoothly.

Bookkeeping tasks associated with accounts receivable include sending invoices, clearing invoices as they’re paid, following up when invoices are unpaid, tracking and recording all payments, and maintaining a clear paper trail of transactions and payments.
  

BE PROACTIVE ABOUT BUDGET CREATION

When you use consistent and routine accounting reports, you can create budgets as frequently as every quarter. 

By reviewing your account records against the same time as the previous year, you have data clarity to set sales goals, expense forecasts, and anticipate variables. 

Before you create your budget, ask yourself the following:
  • Do I anticipate any changes in expenses due to changes in sales? 
  • Are there some costs that will remain the same, regardless of increased or decreased sales? 
  • Do I need to make any operational changes, such as additional employees or a new location? How will that affect my income during the quarter?

Related: How To File Taxes: A Helpful Checklist For Small Business Owners

OUTSOURCE DIFFICULT TASKS TO THE EXPERTS

To successfully manage all the bookkeeping tasks associated with running a business, you need a lot of knowledge about bookkeeping systems, programs, laws, and much more. 

It’s okay to acknowledge that some of this can be pretty overwhelming! 

If you find that you’re spending too much time trying to keep up with bookkeeping tasks instead of doing the work of growing your business, then it’s a good time to look into outsourcing! 


Outsourcing your bookkeeping can alleviate stress, reduce the amount of time you spend on accounting and bookkeeping tasks, and give you the freedom to stay on top of other vital operational tasks.

CHALIFF + ASSOCIATES IS READY TO HANDLE YOUR BOOKKEEPING NEEDS

If you’re ready to outsource your bookkeeping or learn more about a CPA partner for your business, we’re here to help. 

Chaliff + Associates is the ideal bookkeeper and CPA for Memphis-area businesses. We believe in getting to know you and your company so that we can support you in all the ways you need to grow. 

Our goal is to crunch the numbers for you so that you can get back to running your business. 

Learn more by scheduling a free consultation today!