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3 Tips to Win at Bookkeeping

Updated: May 5, 2022


1. Put the Technology in Place


Get the Right Software

No matter how small or large of a business you are running, one thing is for sure: you need accounting software. A handwritten ledger or even an excel spreadsheet will not cut it in this fast paced world.


Set up Software That Works for You

Today’s software options offer a level of automation. You can set your bank accounts up to the software so those transactions are automatically recorded in your books. Of course, you will want to look over this automation to make sure there is nothing excluded or included that you do not want in the books, but that is easy.


Pick an Entry System

Pick a single or double entry system to document your transaction! If your books are pretty straightforward, you can go with a single entry system. A single entry system allows you to enter each transaction into the books as either an expense or income.


A double entry system is where each transaction is entered twice as both a debit and a credit and this is meant to “balance the books.” This system is for companies with large inventories and equipment.


Choose an Accounting Method

Choose an accounting system that is suitable for your business. There are two accounting systems to choose from. The first is cash based. This is when you enter data into your system when cash changes hand. The second type is the accrual system. Here you enter the invoices and bills even before cash changes hands. If you are offering credit or using credit, this is likely the better system for you.


Managing the Day to Day

After the software, entry system and accounting method are set up, now it is time to do the bookkeeping. At this point, transactions need to be entered accurately and timely, and each transaction needs to be categorized correctly.


The categorization of transactions is important for tax purposes as well as budgeting. It is imperative that you have an accurate depiction of where your business spends its money.


2. Avoid the Pitfalls


Do More Than Collect

Have you just been collecting receipts and storing them in an envelope, drawer or shoebox? This is a great way to ensure inaccuracy and time loss. Have a system in place.


All receipts should be turned in and recorded within a certain amount of days. If you have multiple spenders within your business, you may want to consider having an expenditure approval system. The expenditure approval system will help your bookkeeper streamline incoming receipts and due dates.


Loan Payments/Credit Card Payments

Keeping track of loans and credit card payments is important to the creditworthiness of your business. Recording the initial cost, principal and interest is important to ensure proper payment and reconciliation.


3. Get Help


Bookkeeping is time consuming, detail oriented and can become costly if it's not managed properly. But, you don’t have to go at it alone! Accounting agencies like INK Bookkeeping are dedicated to keeping the books balanced and bills paid while business owners focus on the success of the business!


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