As an entrepreneur, keeping accurate and up-to-date records is absolutely mandatory to keep track of your business’s expenses and income, as well as provide you with an accurate picture of your financial standing. This can be a daunting task if you don’t know how to do bookkeeping or accounting, so many small business owners simply put it off. Fast forward a few months later, they’re in a financial dilemma. Since they hardly track their expenses and spending, they barely have a clue which habits are causing money issues and where to start problem-solving.

Fortunately, there are a few simple tips that can help you keep your books in order and stay on top of your finances! In this post, we’ll provide some tips for keeping your books in order so that you can be more organized and save money.

1. Separate Business Expenses From Personal Expenses

It’s important to keep track of your business expenses separately from your personal ones, as this will help you accurately assess how much money your business is making or losing. Create a spreadsheet that separates out all of your business purchases and keeps them separate from any personal purchases you may have made.

For many small business owners, the lines are blurry between personal expenses and business expenses. For example, your home office contributes to your personal electric bill. The company van works just as well to pick up your kids after school. For tax purposes, this doesn’t work as well and will complicate how you can declare expenses. If you’re having doubts about which expenses are personal and which qualify as business, we’ll evaluate your specific situation when you book a free consultation.

2. Track Receipts. Yes, All Of Them

Whether an item was bought online or in-store, make sure to keep track of all receipts related to your business transactions. This way, when it comes time to file taxes or report income, you’ll have all the necessary paperwork handy. If it sounds too tedious to make a note of every purchase you ever make, you’ll want to read the next step.

3. Automate Bookkeeping

This will immediately make it easier to track your receipts. Instead of manually tracking every transaction on paper or in a spreadsheet, you can use apps or software to automate many tasks. This will help save time and reduce the chance of errors when entering data. It’ll also make it much easier to set up a better budget, stick to it, and see how it improves your business.

4. Monitor Cash Flow

Finally, keep track of your cash flow so that you know how much money is coming in and going out each month. Keep records of all your income sources and any recurring payments to vendors or employees. That way, you can keep track of your expenses and make sure you’re not overspending. If you want to know how, here are the basics.

5. Set Up An Accounting System

A bookkeeping or accounting program will make tracking your income, expenses, payroll, and taxes easier. By having all of your financial information in one place, it’s easier to monitor and get a clear picture of your business’s financial health.

What To Do First:

Having a consistent accounting system in place is the number one key to keeping track of your finances. That’s why we specialize in handling that for small to mid-sized businesses. Contact us today at Canada Tax Consultants to get the support you need. Our team will do more than you ever would with bookkeeping, and you can focus on actually running your business.

Regardless, by following these tips, you’ll be able to stay organized and on top of your finances. Keeping accurate records is essential for any business owner, so don’t underestimate the importance of keeping your books in order! With the right tools and mindset, it’s easy.