Posted on: 27 April 2022
Healthy business financials partly rely on accurate bookkeeping, which is an integral part of running a small-scale establishment. Notably, bookkeeping provides critical information that business owners can use to make sound operational, investment and financing decisions. That said, you can only guarantee accurate bookkeeping if you stay on top of your financials and make the process simpler. This article highlights critical and practical bookkeeping hacks to implement in a small-scale business venture.
Leave An Audit Trail
Your bookkeeping efforts can significantly benefit if you leave an audit trail for all your transactions. An audit trail refers to the physical evidence of all financial transactions your business is involved in, and it plays a critical role in simplifying the bookkeeping process. According to financial experts, leaving an audit trail is not just smart bookkeeping, it is prudent. The best way to leave an audit trail for bookkeeping purposes is to record all financial transactions. It means recording and storing important documents, such as invoices, bills, purchase orders and credit card receipts. Most importantly, you should keep a backup audit trail, and you can do it electronically to prevent fraud and budgeting mistakes.
Encourage Daily Bookkeeping Activities
Most small-scale business owners believe that one must be perfect in accounting to keep accurate books of accounts. While an excellent grasp of accounting principles is critical, there is no doubt that consistency is better than perfection. It means that small-scale business owners with a bit of accounting background can manage their books with reasonable success if they are consistent. Therefore, you should make daily bookkeeping activities a habit in your business operations. Consistency in bookkeeping ensures everything is organised and updated. For instance, rather than wait until the end of the month to reconcile your books, make it a weekly activity. It makes monthly and periodic reviews accurate, smooth and less time-consuming.
Stick To Bookkeeping Deadlines
It is easy to procrastinate activities if you run a small-scale business, mainly because there is not much to do regarding accounting. However, setting deadlines for closing monthly and periodic books of accounts and not sticking by them can negatively impact your operations. For instance, if you are supposed to close accounting books on the 25th of every month, going past the deadline leads to inaccuracies because you cannot make timely and informed operational and investment decisions. Besides, sticking to bookkeeping deadlines also helps prepare for the tax season and avoid hefty fines by the Australian Tax Office.Share