The Basics Of Establishing Your Small Business Bookkeeping

When you're launching a small business, one of the things that you need to focus on is your financial management and bookkeeping. After all, if you don't manage your finances and keep track of them, you risk the possibility of losing track of your cash flow and facing serious financial problems. Those business owners who are unfamiliar with bookkeeping practices may not know what to look for when choosing a bookkeeping platform. Here's a look at some of the things that you need to consider.

Automate Your Bookkeeping

When you are focused on getting your business up and running, learning the basics, and dealing with daily operations, it's easy to overlook the bookkeeping tasks that need to be done. After all, paperwork is usually the lowest priority when you're trying to grow your business. 

That's why you should look for an automated bookkeeping system that will handle some of the work for you. Automated bookkeeping platforms can connect directly to your POS system, maintain your inventory, and even download your bank records regularly to keep your chart of accounts up to date.

However, remember that this automation isn't without the need for manual intervention. You'll need to review the records for accuracy weekly, match up transactions, and ensure that your chart of accounts is coded properly for each transaction.

Make Time For Reconciliation

Every month when your bank statements arrive, you need to make time to reconcile your bookkeeping records with those statements. This month-end closing process is vital for ensuring the accuracy of your bookkeeping records and identifying any erroneous charges in your accounts. If you're not comfortable handling this process yourself, or if you don't have the time required to devote to it, reach out to a bookkeeping contractor near you for help. Many bookkeeping services offer closing and reconciliation services for small businesses.

Set Financial Goals

A key part of bookkeeping and financial management for your business includes setting goals for your monthly reports. Take time to create financial goals either by month or by quarter for your business and then assess your monthly account reconciliation and reporting to determine your progress toward those goals.

If you work with a bookkeeping service, you can talk with your bookkeeper about your goals and he or she can help to provide you with some details about how best to reach them based on your daily transactions and financial activity. The more you understand about your financial position, the more successful your business can be.