You started your business because you had an idea, or a talent or a passion. And we’re betting that passion wasn’t for invoicing, collecting debts, bookkeeping, or reconciling your books with tax forms. But all of those things are necessary nonetheless.
If you’re self-employed, here are a few tips to help you save at least save five hours per month on the dreaded task of bookkeeping.
Down with data entry
The small business owner’s biggest bugaboo when it comes to bookkeeping is all the data entry. First you have to make sure you’ve entered all of your income and expenses into your bookkeeping system, then comes all the checking and double-checking if the numbers don’t add up.
Fortunately, apps like GoDaddy Online Bookkeeping allow you to import your financial information, essentially vanquishing the need for data entry altogether.
2. Say No! to paper receipts
Even once you have your expenses entered and double-checked against your books, you have to find a place to store them – for a long, long time. If the IRS decides to come back and audit you, they can request receipts from as far as three years back. Fortunately for you – and your groaning filing cabinet – the IRS has been accepting digital receipts since 1997.
So naturally we recommend digitizing your receipts. Of course, doing that yourself can take time, so we also recommend a service like Shoeboxed. Such services even allow you to search your receipts should a question ever arise.
3. Say Yes! to a business bank account
It’s all too easy for sole-proprietors to fall into the habit of depositing income and paying for small business expenses out of a personal bank account. After all, if income is intermittent or the business is cheap to run, then why bother with opening a whole separate bank account?
But as the business grows, it can be easy to forget whether that $250 deposit was from a client or a refund from the cable company. And was that expense at Office Depot for the business or for school supplies for the kids? (Or, oops, both!) A separate business bank account requires you to keep your business and personal expenses separate, and it means much less head scratching when it comes time to balance the business books.
Take these tips to heart and you’ll save five hours or more every month. The less time you spend balancing your business books, the more time you can spend doing what you love!