10 Essential Bookkeeping Tips Every Small Business Owner Should Know

Written By Frances Keil

#1 Business only bank accounts & credit cards

  • Keeping business and personal separate is KEY. This will make your bookkeeping life so much easier.

  • As a side benefit, this also allows improved personal budget tracking!

#2 Choose partners you understand

  • Bank: direct contact, easy mobile deposit (best if the dollar and number of check limits are high), read-only access options with statements & loan docs. 

  • Payroll: choose a company that will integrate with your bookkeeping software and provides great support

  • Accountant: do you understand what your accountant is telling you? Do they answer your questions?

#3 Decide how you are going to receive payments

  • Having one invoicing/payment processing method is best, choose one that works for your business structure. 

  • Avoid “choosing” to have 3 (ex. Paypal, stripe, QBO)

#4 Check your transfers & credit card payments

  • This is a common area of confusion and error. Make sure transfers and credit card payments are recorded correctly in your bookkeeping system. Transfers in particular can look like increased revenue or expense if recorded incorrectly!

#5 Save for taxes

  • A rough guideline is 30% of net income

  • Have a separate savings account set up for taxes

  • Pay quarterly estimated taxes -  your accountant can help you determine how much you should be paying.

#6 Know how to pay yourself

  • Sole proprietorship/LLC - draws

  • S-corp or LLC taxed as s-corp: owner operator is on payroll, but can also take distributions

#7 Understand your fixed costs

  • If you stopped bringing in revenue, how long could your business survive on a barebones budget? Knowing your fixed costs gives a clear answer to this!

  • Do you have this money saved?

#8 Get professional help with integrations

  • Before you set up integrations between payment processors, apps, or payroll it’s best to get advice from a professional who deals with this all the time. They will know what issues to look out for, if your chart of accounts is set up correctly to handle the integration, and how to troubleshoot issues when they arise.

#9 Track business mileage

  • This is boring, but is often the best deduction. So find a way to track business mileage that works for you! Many of my clients like using the app MileIQ.

#10 Manage receipts

  • Decide on a system and stick with it. Common options: physical folders organized by month, digital folders, integrated into your bookkeeping software, and separate receipt management software.

Frances Keil https://modernbookkeepingservices.com