Xero bookkeeping software has become extremely popular with small retailers over recent years. Given its ease of use and ability to integrate seamlessly with plenty of everyday business applications that’s hardly surprising. I still get calls from small retailers asking why they should make the switch to Xero bookkeeping software. There are plenty of good reasons why but I’ve decided to create this quick “how to” as it provides some insight into just how easy using Xero bookkeeping software can be for you.
To use Xero you’ll need this:
1. A decent internet connection. For cloud-based bookkeeping to work effectively, you’re going to need access to a stable and reasonably fast internet connection. Unfortunately, anyone who tells you different to that is being less than honest about it.
2. A desktop or laptop computer, a tablet, or a smartphone. Of course, you’ll need to be able to connect these devices to the internet too!
3. A Xero account. If you don’t already use Xero they currently offer a free trial of their bookkeeping software. Click here and let me know if you’d like a free trial of Xero and I’ll organise it for you.
When you log into Xero the first thing you’ll see is a menu bar on your screen with buttons showing Dashboards, Accounts, Payroll, Reports, Advisor, Contacts and Settings. It feels intuitive and it’s one of the things I really liked about Xero right from the first time I ever used it.
NB: The Payroll and Advisor buttons may not appear on your screen due to your access setup.
My advice would be to go straight to Dashboards when you open Xero. You’ll notice that there are mini-summaries of your bank accounts, sales dash, purchases dash and your expenses in this area.
Click Accounts and a drop-down menu will allow you access to what you’ll need there. The Payroll button provides access to your employees and their details, timesheets and superannuation.
The Reports tab gives you access all reports on your accounts, plus the budget manager. Frequently used reports can be highlighted with a star and will also appear on the drop menu. Of course, you have access to all end of financial year reporting and reconciliation reports – plus you can export from Xero as well.
The Adviser tab (if you have it) is for users with advisor access, like your accountant or bookkeepers. You can manually enter journals in here if you wish to. As a retailer, you probably won’t be using this tab very much.
The Contacts tab displays customer and supplier contacts. Xero contacts are all set up in the exact same way and you can also set up contact groups. This means you can classify and group customers almost any way you wish to and see your groups in the drop-down menu.
Last of all is the setting tab. Here, you’ll find the general settings for your Xero account. If you are using an advisor (always recommended) they will generally take care of all this for you.
Now, let’s take a look at how to use Xero
If you’re new to Xero and still using their free trial, you’ll be immediately directed to their step by step guide as soon as you log in.
First up you’ll want to connect to your bank account. Click on the Get bank feeds button and it will take you through to an authorisation page that allows you to get your feed activated. When you’ve completed this your account information will be automatically linked with Xero. Just this one function helps to eliminate a great deal of human error.
It’s important that your business details are entered correctly. Navigate to the Settings menu and select General Settings, then Organisation Settings. Here is where you’ll enter your company details. Make sure you take the time necessary to get this 100% right, as this is what will appear on invoices and other forms generated by Xero.
Xero allows you to customise the look and feel of your invoices. Navigate to Settings again and then select Invoice Settings. From here you can upload your logo so it will appear on all of your invoices. You can also set a starting point for your invoice numbers, which may be really helpful if you are moving across from another bookkeeping system.
Xero makes it easy to add a payment gateway so that your customers can pay your invoices by clicking a Pay Now button. The setup process for this is fast and intuitive. You’ll be able to bill customers and get paid just as soon as you’re done with this process.
The default chart of accounts in Xero is pretty good and you might only need to make a few minor changes to be completely happy. If that’s all you need completing this should be over in a just a few minutes.
Xero has import tools to help you with this, making it possible to import your existing charts of accounts including opening balances, etc. How to import accounts from your old bookkeeping system is beyond the scope of this article. Realistically, you might want to get a Xero certified consultant to help you do this as things can and sometimes do go wrong.
If you have any unpaid invoices you can bring them across to Xero. Navigate to Sales or Purchases and just click the Import button. It’s easy enough to use the template provided. Just copy your data into that and import the template file to Xero. If you don’t have a lot of invoices you can do this manually.
If you have an existing list of suppliers they can easily be imported into Xero too. Unlike with some programs a contact can be both a supplier and a customer in Xero, so you won’t need to add a contact more than once.
Xero has a large and constantly growing variety of add-ons. Add-on’s increase the power and usability of Xero with applications for receipt scanning, point of sale payments, inventory management and even CRM solutions. You can check out the Australian Xero Apps Marketplace here: At the time of writing, there are over 600 Apps available!
If you want to grant other people in your business access Xero you can do that. Navigate to Settings, then Users and invite the people who need to use the system.
Like all bookkeeping programs, Xero is only as good as the people who use it. It’s definitely a good idea to work with a Xero Certified accountant or bookkeeper. They will know many things that you don’t about how to take advantage of Xero and will be able to guide you on the best ways to make Xero work hard for your business. As a Certified Xero Bookkeeper, I’ve helped many small businesses to implement Xero and get it working for them. If you feel that you need some help, I encourage you to reach out to me by clicking here. I’ll be happy to give you a free 30-minute consultation and help you figure out if Xero is right for you.
People have been predicting the arrival of the paperless office for decades, but for whatever reason or reasons, paper is still to be seen everywhere in almost every office. Most of us don’t think about it much, but our businesses often expend a whole lot of time, effort and money just moving paperwork around from one place to another. It doesn’t make sense, nor does it need to be this way. In almost every area of business, it’s now feasible to get rid of paper entirely.
Firstly, business owners need to ask themselves what might seem to be a rather obvious question: Why do they store documents at all? In most cases, the answer is that they are required by law to retain them for a certain number of years. Invoices, receipts, banks statements and a ton of everyday transactional documents can clog up everything from a simple shoebox to entire buildings. The storage industry has largely been built around the need to retain such items.
The obvious alternative to storing paper-based documents is to digitise them, then store them locally or in the cloud. Here are the key advantages of taking that approach.
I’ve already mentioned how much space document storage can consume. Digitising documents can reduce storage space from rooms or buildings to a simple digital drive (or even a thumb drive). The cost savings are obvious.
Government agencies, law firms and other organisations used to (some still do) employ archivists. Their job was to record the location of every document ever used, so it could be retrieved. Digital technology makes that same tedious task achievable in just seconds – no human beings needed!
One of the primary reasons for storing documents is so that they can be shared with people who need to see them. Digital storage and retrieval offers the important benefit of being able to instantly share documents with people across the room or across the world.
What’s more secure – a room full of paper that could be stolen or go up in smoke, or digitally stored (and backed up) files held in multiple, secure locations? The answer is so obvious that it barely requires any explanation.
One of the primary drivers of paper accumulation is accounting and bookkeeping. Xero bookkeeping software offers a cloud-based solution that can virtually eliminate your need to store paper – and offers all of the benefits outlined above about digital storage.
Invoices can be created and emailed to customers with Xero in real time, either from your office or out on site. Invoicing is simple and easy, with apps making it possible to create an invoice from your mobile phone in seconds.
Receipts can be scanned straight into Xero, also from your office or out in the field using an app on your mobile phone. No need for paper!
Going paperless with Xero is easy, with Xero able to electronically access, encode and enter your bank statements straight into the Xero system.
Storage and retrieval
Store all of your accounting records digitally in the cloud, then retrieve what you need at any time, with Xero. Not only is storage convenient and easy, Xero provides direct visibility over which documents are associated with a particular transaction or transactions, leaving a flawless audit trail.
If you’re uncertain about the benefits of going digital with your accounting, I can organise a free trial for you with Xero. The free trial will let you see for yourself that Xero delivers on the promises it makes and how well it does that. Click here to send me an email or just give me a call on 0447 370 301.
Most small business owners have a smartphone and probably use it to do a range of things that were once considered time consuming and difficult. Did you know that you can save time and money by employing apps to solve some everyday business problems? In this article we’ll take a quick look at 7 types of apps you can use in conjunction with many bookkeeping and accounting software packages, that can help to literally transform your business.
For Businesses that Send Invoices
Invoices are almost always paid outside of businesses trading terms. When invoices are sent and offer instant payment options like PayPal, credit card, or other online payment methods accounts are settled faster. In some cases, money comes in twice as quickly, dramatically improving your cash flow.
For Retail Businesses
Point-of-sale payment apps can turn your smartphone or tablet into a portable cash register. Deployed properly and with minimal training, your staff can serve customers right where they are rather than creating a bottleneck at counters, bars, etc. You’ll be able to do away with your traditional cash register, entirely.
Most business owners hate keeping track of their business transactions. Entering small receipts is an annoyance so great that many business owners procrastinate until the last moment – and end up having to enter a mountain of transactions in their bookkeeping system. Dealing with a mountain of paper receipts makes it even more annoying.
Automate the process. New technology allows you to use your smartphone to record receipts by simply photographing them. The app reads the image you’ve taken, captures the purchase data and sends it straight into your accounting system. It does the same for electronic invoices. All you need to do is forward your emailed invoices to the app and let it do the rest!
Sub-standard timekeeping can cost you money. From compliance-related issues, through to overpaying hourly workers and over-servicing clients, effective timekeeping is critical for many businesses. Most small business owners think that a quality timekeeping system will be expensive and difficult to use. Apps mean that’s no longer the case.
Timesheet apps allow staff to clock on from their smartphones, using the phone’s GPS to confirm they’re actually at the required work location. There’s no infrastructure to buy or install, as you’re leveraging from existing technological infrastructure such as the internet and GPS.
Time records can be coded too, allowing you to properly attribute how much time is being spent on specific tasks and/or jobs.
Inventory management is a nightmare for many businesses – often consuming weeks each year through periodic stocktakes. That not only costs you time and money but limits your ability to produce truly useful information, like calculating the true cost of goods sold (COGS).
Apps can do a lot of the heavy lifting for you, adding new items to inventory as stock comes into your business and subtracting goods as they’re sold or used in the manufacturing process. With minimal staff training, you’ll have a real-time view of your current inventory, helping you to get your ordering right and allowing you to drill down hard into COGS.
Increasingly, businesses are selling their products and services online – not just through their own websites – but via large, organically visible platforms such as Facebook, Amazon and eBay. Those big platforms can really expand the reach of your business and add plenty of profitability to your bottom line.
That said, e-commerce can be incredibly daunting and staying across multiple shops can be nightmarish. Now, off-the-shelf apps have you covered, integrating seamlessly with your accounting software, so you can keep oversight of the whole business, regardless of what platform you’re selling on.
Set up and used properly, customer relationship management (CRM) software can bring discipline and efficiency to your sales process.
Set up your CRM to reflect the steps of your entire sales cycle, then work out where each of your current prospects sits within that funnel. Over time, you’ll be able to work out with a high degree of accuracy what sales and/or marketing activities are required at each stage of the sales cycle, perhaps even automating some of those activities.
A properly configured CRM will help you to work out when prospects might turn into sales, helping with your cash flow management. Your CRM can be synced with your accounting software too, enabling sales personnel to issue invoices immediately they convert a prospect into a sale!
It takes a lot of effort to pay people the right amount, on the right day, whilst complying with all of your tax obligations and various and reporting requirements. All quality bookkeeping systems offer payroll management. These systems automatically calculate tax, superannuation obligations, your reporting requirements and in some cases pay salaries directly into staff bank accounts.
Payroll apps can make it easy for you reimburse expenses, keep track of employee leave and leave requests, monitor long service leave calculations and deal with a wide range of other uniquely payroll related issues. They also allow you to manage payroll on the move, via your smartphone or tablet.
There are literally thousands of business and accounting apps on offer for IOS, Android and Windows. Some are free. Some cost quite a bit of money. In the coming months, I plan to individually review some of the apps that I think offer something special for your business and/or offer great value for money.
Checking out the various app stores and reading the reviews is always a great start. I’d be interested to hear about any business productivity apps that you’ve found to be particularly worthwhile.
Xero is one of the most popular online accounting software programs. It costs quite a bit more than some of its competitors, but it has a dazzling array of add-ons that makes it more useful to almost any kind of enterprise. Xero does things that were unthinkable just a few short years ago.
Even if your accountant or bookkeeper doesn’t use Xero it’ll be unlikely that they haven’t heard of it. Sometimes referred to as the Apple of accounting software, Xero’s rapid rise from New Zealand start-up to the clear market leader in cloud-based accounting took many people in the accounting business by surprise. Its intuitive design and first-class user experience continues to drive the development of Xero. Their value proposition of “Beautiful Accounting Software” is a self-evident truth for everyone who has ever used Xero.
Xero currently boasts more than a million subscribers worldwide, with almost half of them in Australia. A large part of Xero’s success has been its marketing push to accountants and bookkeepers encouraging them to reinvent themselves as business advisers. Whilst this isn’t new, with the bookkeeping process becoming more automated, compliance work is becoming less profitable for advisors. Xero is clearly promoting automation as a bonus to advisors, as it allows them to free up time for higher paid and more worthwhile work.
The big differentiator with Xero is that it’s the only client accounting software vendor, which also provides a cloud-based practice management suite. Xero does pretty much everything a small business needs including general ledger, billing and expenses, quoting and invoicing and payroll, complete with automated superannuation. Xero includes some CRM functionality, although this is not really a fully-featured part of the product.
Bank feeds have been around for a long time now, notably with BankLink. Xero has made bank feeds easier to use and have automated the process through auto-coding rules. This is now a fairly standard feature of all cloud-based accounting software, but Xero did it first.
Xero has been a clear market leader in encouraging the development of linked cloud applications. Their developer community now has several hundred apps available to extend the core functionality of Xero. This makes it easier for business owners to automate certain processes including instant sharing of invoices, contacts and other data. The number of integrations and the functionality they offer is set to keep expanding. Probably dramatically.
Xero’s online invoicing makes it simple and easy for clients to pay invoices immediately. Xero offers an integrated payment gateway, which provides obvious advantages for most small businesses. The company claims in its marketing literature that the integrated payment gateway has reduced average debtor days across its entire customer base. That’s some claim, but as anyone who has run a small business knows, improved access to payment options tends to improve payment times. Xero gets a big thumbs up for that.
One of the most exciting things about Xero is its mobile apps. Users can take photos of receipts with their phones; attach them to expenses and save them to Xero for later approval. The Xero Me app allows employees to submit timesheets, manage leave requests, check their pay details and more. Available for both IOS and Android, Xero Me is a welcome addition for small businesses managing even a relatively small number of employees.
If Xero has any major drawback it’s inventory management. Xero acknowledges this weakness and recommends that certain businesses should use an app to extend core inventory functionality. This mostly applies to businesses that have:
Plenty of small business owners complain about the cost of using Xero. Frankly, I don’t think that is overly justified. Starting at $25 per month for a business with a single person on the payroll, Xero only costs $100 per month for a business with 100 on the payroll. There are other variables that determine the cost of Xero, but the number of people on the payroll is generally the biggest influence on pricing. Considering all that Zero offers and the time saved over traditional bookkeeping, Xero is extremely cost-effective.
Given the feature-rich nature of Xero, it will be a good fit for almost any small business and many larger enterprises too. One of the best things about Xero is their free 30 day trial. You can try Xero for yourself and see if it’s a good fit for your business, without obligation. Monitor Books can organise a free trial of Xero for your business and make some recommendations to ensure that you’ll get the most from your free trial. Click here to organise a free Xero trial, plus a free initial consultation on how your business can get the most from Xero. It’s easy to use software that you’re going to love!
One way to detect any unusual transactions is by comparing your records against the bank records. This practice is known as bank reconciliation.
You reconcile your accounts by comparing record of balances and transactions to monthly bank statement. You will need to review each transaction to ensure that the amounts match perfectly. The bank statements should also show an ending account balance. Bank reconciliation is similar to balancing your checkbook. Both tasks are done for the same reason. Although you may see some slight differences, the differences must be properly explained. One good reason that your transactions may not match is when you write a check to a vendor. This will result in reducing your account balance accordingly. However, your bank will show a higher balance unless the outstanding checks hit your account.
Another reason you will see these differences is when an automatic electronic payment is paid into your account. If it appears on your account earlier than expected, discrepancies will be evident. There is no need to worry as long as the discrepancies can be accounted for.
Problems only get out of hand if accounts are not reviewed regularly. Bank reconciliation will enable you to:
Fraud cannot be easily caught unless you perform a thorough investigation by going through your records. Checks that are manipulated or duplicated is a sign of fraud. If checks are issued without authorization or there are frequent incidents of unauthorised transfers, you know that your employee is getting more than what he or she should be paid for.
There are issues that need your immediate attention, but as your business grows, you become busy taking care of other aspects of your business that you no longer have enough time at your disposal. Bank reconciliation helps you to prevent or identify problems by catching bank errors, ensuring that everything goes into your accounting system properly, keeping track of your outstanding checks, knowing how you much you have available in your bank account and more.
Business owners must see to it that accounts are reconciled at least monthly. However, if you own a high-volume business where fraud is a risk, you will need to perform bank reconciliation more than once a month. Some businesses even reconcile their bank accounts daily to prevent any unauthorised transactions.
There are many ways you can perform bank reconciliation such as creating a bank reconciliation statement. The first step is to match your transaction and compare your balance at the end period which can be daily, monthly opr quarterly. Your bank should give you access to your online account so you can view and download bank transactions regularly.
Having a bookkeeper gives small business owners peace of mind knowing that income and cash flow are well taken care of. However, discovering that your bookkeeper is stealing from you only denotes that your business has very little chance of success. The tricky part about bookkeeping is that you will never know that fraudulent transaction happens until you discover your financial records. Failing to pay close attention to your records can make you more vulnerable to employee theft. Here are signs our bookkeeper may be getting more than just his or her paycheck:
One of the things to look for when you are highly suspecting your bookkeeper of stealing from you is by checking your bookkeeping records. This is one way to detect that your bookkeeper has been manipulating your records. While occasional adjustment is considered normal, seeing a pattern without any valid explanation only shows that there is a serious problem. If books are not adding up and you do not know where problems are coming from, you will need to ask hard questions to find out about the discrepancy.
If there is one person that should be the most open within your business, it is your bookkeeper. A bookkeeper is responsible for showing you everything within the bookkeeping software at all time. It is a cause for concern once a bookkeeper is trying to hide the books from you. Since you are the business owner, there is no valid reason that you should not see the books. If a bookkeeper is habitually stealing from your company, he or she will hesitate to turn over financial information.
Businesses regardless of the size should give importance to cash flow because it is the lifeblood of every business. The reason you hired a bookkeeper is to keep your business on the right track. Most business owners can easily predict the levels of cash based on the number of customers they have. The number of invoices being sent out also gives you an idea of your funds. You can easily uncover a problem by considering this factors.
Although bookkeeping for small business is a job that one person can work on, there are times when two heads are better than one especially when you are you have a lot of bookkeeping obligations to handle. However, a bookkeeper who prefers to work on their own may have an ulterior motive, which you need to find out as this is considered a red flag.
Bookkeeping is one of the least appealing tasks for small business owners. It is often set aside to make way for other business obligations. Negligence of bookkeeping tasks has an impact on your business. Here are 5 bookkeeping errors that should be avoided whenever possible.
Errors of omission is a common mistake that is often overlooked unless its negative effects become obvious. When buying inventory or collecting payments, it is important to record transactions to prevent business activities to slip through the cracks. You will instantly throw off your books if your financial records are accurate. Aside from having difficulties measuring your profitability, filing small business taxes will also be a challenge. Make sure you note every business transaction even the ones you deem insignificant. Make it a habit to keep the receipt and organise small expenses into their proper accounts. Every business keeps a small amount of cash on hand. This is referred to as petty cash. In case you are going to buy something with petty cash, make sure that the purchase is recorded.
While cash flow and net profits have to do with expenses and income, there is still a big difference in how cash flow and net profit measure money.
Net profit enables to determine whether you are making money after paying your expenses. Your net profit is obtained when you subtract your expenses from your sales. It reflects the amount of cash your business gained during a certain period as it also measures a specific block of time.
Cash flow has to do with measuring how fast you move money. It also gives you an idea of the amount of cash coming in and going out of your business. This is shown on your cash flow statement. Your cash flow shows you the liquidity of your funds. It is important to know the difference between net profit and cash flow because when making a sale, but you do not receive the payment right away, it will only reflect the net profit you earned. Since the customer has not made a payment yet, it will result in having low available funds (cash flow).
Financial records need to be accurate at all times. Aside from keeping records and receipts, reconciling your books with your bank account is also a must. Your accounting records and bank statement should match. However, if you fail to reconcile your books, accounting errors will go unnoticed. When you reconcile your accounts regularly, it will be easy for you to spot errors of original entry. Some bookkeeping errors are a simple fix, but since they are ignored, they will snowball into a bigger problem in the end. Keep in mind that it may take six months to notice the mistakes when filing taxes. These errors could have been prevented, have you been diligent in reconciling your accounts.
If you are working with limited funds, you need to avoid overspending and plan for income and expenses according to your business budget. Using a budget helps you keep your money on track. It also saves you from any guesswork in financial planning. Refer to past bookkeeping records so you will determine future income and expenses. You will also need to stick with your budget once you have put it in place to prevent overspending.
Just because you are a small business owner does not mean that you should not hire a bookkeeper and resort to DIY bookkeeping. Your obligations become unpredictable when that it results in ignoring your bookkeeping tasks. Although managing your books demand time, it is important to find an effective way to handle this task so you can focus on running your business.
Discovering that the employees you trust for many years have been stealing from you is definitely devastating. More often than not, fraud and theft happen when you least expect it. When you have trusted people around you, there are no nagging doubts that you will fall victim to these crimes. As a business owner, being cautious is necessary. Even if you have the most trusted employees, fraud and theft can take place when you do not keep your books in check. Here’s a guide to preventing or reducing employee fraud and theft:
Some business owners implement stringent policies so fraudulent activities do not go unchecked or unpunished. For instance, Walmart does not allow employees to accept a cup of coffee or a bottle of beer from a vendor without paying for it. It sends a signal to everyone that the company is not tolerating the illegal behavior. Although not everyone can be as strict as Walmart, posting a clear code of conduct will make employees aware that misbehavior is unacceptable. The code should be given to everyone upon hire. There should also be a written acknowledgement to ensure that everyone agrees and understand it. Being the enforcer of the code, employees are also expecting you to lead by example. What is the point of following strict rules if employees see you use company property or take home merchandise?
For small business owners, wearing many hats is normal, but multitasking can be dangerous if it involves opening the mail, handling payments and deposits and filing transaction documents. These aspects of the business should not be assigned to one person only. Assigning the same task to the same person only spells trouble. There should be separate people for managing accounts payable and receivable, handling purchasing and more.
While your bookkeeper takes care of bank and credit card statements most of the time, there should be another person to reconcile bank statements. However, this person should not have the ability to modify or enter transactions in the accounting system. The modification must be restricted as this only opens the door to committing fraud. Confidential financial information must be locked up. Enforce rigorous key control and have a computer-system access. It is common for business owners to retain login information without realising that a departing employee still has it. Change your login credentials once the employee leaves.
A tell-tale sign that your employee is committing or about to commit theft or fraud is when there are changes in their behavior. Have files been misplaced? Are they giving customers excessive attention? Are they routinely working early or late when no one else is around? While you may dismiss it as working extra hours because they love their job, it is also a sign that they do not want others to see what they are doing. Even minor blips in your operation is already a red flag.
Once you feel that something does not feel or look right, it is probably not. Take time to investigate as you could be losing a big amount of cash.
We have been told time and again about the importance of bookkeeping, but we always find ourselves procrastinating because it is the job we always have a love-hate relationship with. Bookkeeping is defined as the storing, recording and retrieving of financial transactions of an organisation. It includes tasks such as sales, receipts, payments and purchases. There are several methods involved in bookkeeping, but one thing is for sure, we cannot maintain the finances without bookkeeping.
Part of operating your business is to manage customer and supplier accounts. With bookkeeping, you will be able to create a business player, track deposits and monitor payments. You will also know how to make sure that every dollar spent is intended for your business. When you update your books, you will know the financial state of your business. If you have an outstanding bill, income information, unpaid invoices or payroll estimation, you can gain access to these by simply looking at your financial statement.
Thinking about expanding or growing your business? It will not be easy without knowing your financial performance. Banks will not trust you if you have unpaid bills and delinquent accounts. If your records show that you have the ability to pay a loan, the bank will not have any second thoughts of approving your loan application. However, if your records indicate that you are running low on capital, it will be difficult for you to take out a loan.
Can you imagine operating your business without hiring a qualified person to take care of your books on a daily basis? Can you be confident that your business is on the right track if no one ensures that your checks will not bounce and you have enough capital for expansion? Will you be able to have a good night’s sleep knowing that you are falling behind your payment schedule as you do not have a bookkeeper to remind you when your payment is due? Not having up-to-date records will run you the risk of losing money. Business growth opportunities are missed and payments will not be made in a timely manner.
Bookkeeping should not be underestimated as it is an integral part of every business regardless of the size. If ever you find yourself ignoring bookkeeping, think about its repercussions. Without bookkeeping, your business will suffer from the lack of financial stability for sure.
One reason most business owners are tempted to procrastinate when it comes to dealing with bookkeeping is because the task is time-consuming. If you have a very busy day, bookkeeping has to take a backseat. Sometimes, you sacrifice quality to save time. Bookkeeping is essential to ensuring that your business runs smoothly. It does not require extended amount of time by giving your bookkeeping system an overhaul.
Manually processing your employees’ paychecks can demand a large chunk of your time. Aside from going through each employee, you will have to print the checks, approve the hours, sign and date the checks and even mail them. Automating your payroll system bypasses these processes. You will only have to focus on one task as the automated payroll system can handle all the tasks. Your job is to approve the payment and once done, the checks will be sent out immediately. Your employees will also get the checks faster.
Taking several trips to the bank can be tiring. This is why an institution that offers online banking can give you convenience as you no longer have to drive out of your way to deposit checks or withdraw funds. All you have to do is to click a few buttons so you can process your bank transactions. As a result, it will be easier for you to issue refunds and pay vendors. There is no need to worry about falling behind payments schedule. You can also get instant access to debits, credits and account balances.
Another technique that will keep your bookkeeping to a minimum is to invest in bookkeeping software so you can record your deposits and debits, track your bank transaction and create financial reports. You will no longer have to worry about creating a manual report because the software takes care of your bookkeeping tasks, making sure you have balanced and accurate books. All you need is to dedicate regular time so you can review your report.
Although most business owners make it a habit to have a separate business account, there are still small business owners who do not know the negative implication of mixing personal with business accounts. It is easy to lose track of your spending habits if you do not have a separate account for your business finances. However, this can also affect your cash flow as it is already too late for you to realise that you failed to monitor your financial activity.