As you create new business goals this year, keep these bookkeeping practices in mind.
The year has gone too fast. Before you know it, you’ll be wine toasting and lighting up fireworks as the world counts the seconds down to welcome the new year. However, we wouldn’t recommend putting off your year-end planning, such as bank reconciliations and tax payments aside.
Save yourself the stress by including this in your new year’s resolution! We’re here to give you ways to improve your bookkeeping services this coming 2022.
What is bookkeeping?
Bookkeeping is the daily record and organization of the financial transactions of a business. This part of the accounting process is essential to ensure that your financial reports are accurate and up-to-date. Bookkeeping requires accuracy and keen attention to detail.
Bookkeeping includes every transaction, from purchases and sales to invoices and receipts, which gives businesses a better picture of their accounts. This, in turn, can help in improving business strategies and performance.
Other individuals and non-profit organizations also require bookkeeping on their end. Recording of all transactions includes expense payments to suppliers, loan payments, customer payments for invoices, and other processes that generate financial reports.
New year bookkeeping resolutions
The beginning of a new year is exciting and nerve-wracking at the same time. You get to unlock new opportunities for next year’s successes.
As the year comes to an end, businesses have to prepare for the next financial year. Add the following bookkeeping practices to your new year’s resolution to get the best out of it!
Determine your cash flow by the end of the year
Before jumping into the new year, take a good look at your last year’s report. Are you on the longer or shorter side of the stick? If you are on the shorter side, rethink how you can manage your year-end expenses.
Determining your cash flow gives you a quick analysis of the liquidity of your business for the entire year. Computing for your working capital will prepare you better if problems and emergencies occur.
Plan for your year-long income, expenses, and taxes
Planning ahead of time is essential for any business to prepare for year-long expenses and taxes. Budgeting ensures that the whole year will be profitable.
With proper budgeting, you’ll be able to account for major expenses you will have during the year. You will know better if you can accommodate any emergencies that may come up and the taxes you need to file.
Update your payroll system
Updating your payroll system at the first quarter of the year will smoothen your business operations and save you from paying unnecessary expenses.
Keeping regular payroll documentation for your employees electronically rather than with paper checks can save you more time. It will also be easier for your team to classify your employees correctly, whether independent contractors, freelancers, or consultants.
Use bookkeeping software
Bookkeeping and accounting software will help you accurately track financial records, understand your inventory and profitability better, and prepare for the tax season.
Utilizing cloud-based bookkeeping software will make your repetitive tasks a whole lot easier and streamline the entire process. You might also opt to move from a paper-based filing system to an electronic filing system.
All you have to do is conveniently upload documents to your bookkeeping software so you could allocate expenses accordingly and prepare your audits and tax filings.
Complete a monthly audit
Bookkeeping will help you become more organized. This is especially beneficial when you are doing your monthly audit. As your bookkeeping processes progress, you must double-check all of your transactions by the end of the month.
To help you keep an accurate record, plot a monthly audit to make sure all of your receipts, documents, and finances for that month are correct. By the end of the year, it will be easier for you to complete your year-end work.
Hire a bookkeeper
To accomplish all of the resolutions we mentioned above, you will ultimately have to hire a bookkeeper! You can outsource your bookkeeping services to an external provider to manage your business finances better.
Hiring a bookkeeper will give you access to a pool of experts who can perform your bookkeeping processes in the best way possible.
Start your year right
2022 is just sitting around the corner. In a few days, we’ll be refilling calendars, buying new journals, and generating a new list of new year’s resolutions. As you create new business goals this year, keep the bookkeeping practices we’ve listed above in mind.
One of the best ways to up your game in the coming year is to get your finances in order and improve your bookkeeping services. This will not only give you tension-free operations and smoother financial transactions but will also streamline your entire bookkeeping process.
