Financial Recordkeeping. Have You Used These Tips?

dianeadsmith December 28, 2020December 28, 2020

One of the most crucial records to maintain for any small business is its financial records. However, this aspect of the business is most neglected. The reasons could be:

The small business owner is not sure how to do it correctly.
They are unable to find to do it on their own

Several others believe that they will save money by doing it on their own. They think that they can save money by doing it on their own as hiring an NYC CPA will be too expensive. However, this mentality can cause problems. The legal record requirements maintain that businesses are needed to maintain the records accurately. The easiest way to keep and maintain the businesses financial record is by using good accounting software. Here are some tips that can reduce the stress of financial record keeping and make the task easier.

1# Start with a Bank Account

A business has to be distinguishable from the owners. The easiest way to do so is to establish the bank account mainly used for the business. It helps to distinguish from the owners and separates the business activities and expenses from the personal ones. Using a business bank account helps you to track the business income and expenses easily.

2# Don’t Use Cash for Transactions

Spending cash in the absence of proper documentation makes it very challenging for the business to maintain proper financial records. It can easily be forgotten how and where the money was spent without proper documentation. It is highly suggested that you must use a credit or debit card or check instead of cash as there is a paper trail to follow. The practice will help to keep track of the expenses. When you use cash instead of other payment methods, you could also be missing out on taking advantage of write-offs. There is no documentary proof. If you need to use cash, pull the money out of the ATM and note the receipts to take care of the withdrawal.

3# Dedicate Specific Time

If you are going to keep and maintain the business records, make sure that you dedicate specific time each week to make your records up-to-date. Take some time to review the income and the expenses and manage the accounts receivable and payable. Once you establish a set schedule, it will help you ensure that you remain on top of your financial record and give you the required overview of how the business is doing. It also allows you to control the cash-flow.

4# Purchase the Right Accounting Software

If you have decided to do things on your own, you need to purchase the business’s right software. If you are not sure how to go about it, you should consult an NYC CPA who would provide the right guidance.