Wednesday, May 27, 2015

How to bookkeep like a pro with 5 simple techniques

Learning how to bookkeep does not have to be difficult. Many Canadian small business owners do their own bookkeeping and maintain balances on accounts to give to the accountant at tax time. Learning how to bookkeep can save you money. we give you five basic principles on how to book keep on your own . follow these principles so that you can hand the bookkeeping over to the accountants and tax preparation should be a matter of simply importing the data.

1: Set up bank accounts just for your business. 

Bookkeeping becomes a whole lot easier when you separate personal expenses from business expenses. if you are a sole proprietor, this can be as simple as getting a different account in your name that you only use for business expenses and where you deposit your business income into. this will also allow you to easily sync the account with bookkeeping software such as QuickBooks if you desire. Syncing with QuickBooks allows you to download transactions straight from your bank account. Do the same with credit cards if you use credit cards. Credit cards are so easy to get nowadays. If you have a corporation, make sure that you only use one account and do not mix personal accounts.

2: Keep Receipts & Records

I know it's a pain in the neck to manage all those receipts, but it's important and you'll be ever so glad you did it if you ever get audited. Keep all business receipts, statements, invoices, and any financial records related to your business. You will want to categorize them into tax deductible expenses. Get yourself a file storage bin or a filing cabinet and sorts receipts according to the expense. Another option for storing financial records is to scan them into your computer with products like neat receipt and links them to transactions in QuickBooks (U.S. Version). Remember, in Canada, you need to keep the original receipts. Just to be safe, you will want to keep the originals and also scan copies of the receipts into your computer.

3: Record the data onto computer software. 

QuickBooks is the number 1 bookkeeping software used by small businesses and entrepreneurs. just about every accountants uses QuickBooks so transferring data will be easy when it comes to tax time. Recording expenses and income is a simple task with the software, and just about anyone can learn how to do it in a few hours by watching videos on YouTube. When it comes to recording assets, loans, and deppreciation, you can always get help from your accounts and if you do not feel comfortable making those entries. QuickBooks Online is a good choice for self-employed individuals who have no employees in very few transactions. QuickBooks Online is very basic and most small businesses prefer to use the desktop version of QuickBooks because it is faster and has a better user interface.

4: Track vehicle mileage. 

This is probably the simplest exercise when it comes to recording data about your business. it's amazing to see how many people do not keep mileage records for business miles driven. You can do this by keeping a mileage log in your vehicle and recording mileage for every trip that you go on for business. QuickBooks also offers mileage recording apps on their software. Every time you do the QuickBooks, you can enter the mileage. You will want to write down what the vehicle mileage was at the beginning of the trip and what the mileage was at the end of the trip. Also write down what the purpose of the trip was. 

5: Balance your accounts on a regular basis. 

With QuickBooks, this means reconciling bank accounts and credit card accounts either once a month or once a quarter. You will do this for each account that you have related to your business. That means bank accounts, credit cards, and cash purchases. Cash purchases cannot be reconciled, but the cash clearing account will need to be cleared into a shareholder loan account. In terms of how often, it really depends on how many transactions you do. If you have a sales business such as selling on eBay or online sales,  you may want to do it more often because entering all those transactions can be overwhelming if left for too long....

To learn how to keep is not difficult it is good practice for any small business owner to do. The truth is, once you get busy you just don't have time to do bookkeeping on your own. most small businesses will hire a bookkeeper when it becomes a feasible option for them. it just makes sense to focus on your business and farm out bookkeeping work to a local bookkeeper. But in the meantime , figuring out how to book keep can teach you how to keep tabs on your business, your finances, and learn what is most profitable for you and your business.

To bookkeep on your own can end up being more work than expected, but it can be done. If you try and decide you'd rather have someone else do that job, give Dymas Services Ltd. a Call. We are located in, and preform Calgary bookkeeping services. We can also do remote bookkeeping if you are out of our area. Use the sidebar to get a hold of us.