Financial software can be tremendously helpful to small business, especially if the small business is being run by just one individual. There is a risk when one person has to do everything in a business that tiredness will creep in. This can’t really be allowed to happen when doing bookkeeping on one’s own.
The advantage of financial software is that it will both help to eliminate human error and save time. Using financial software will allow you to relax more or work at other aspects of your business. The cost of hiring someone to do your bookkeeping also becomes no longer necessary. So, using software can not only save you time, but money as well.
There are several steps that need to be adhered to regarding bookkeeping. They are simple enough to follow, but some of them can sometimes be overlooked.
Keep daily records. It can be difficult to do bookkeeping every day when you are side-tracked by other things that you may deem more important. By bookkeeping every day you will, however, save time in the long run. If you stop making bookkeeping entries for a few days, you may forget where the relevant information is. Then you will be wasting valuable time trying to find it. Just spending a few minutes bookkeeping each day will alleviate those problems.
Never throw out receipts. These are important to keep not just for you as proof of transactions, but will also back up the accuracy of your own bookkeeping.
Allow yourself time to get to grips with any financial software that you plan to use for bookkeeping. Continue to use the paper method until you are confident enough to go down the software route. Also always back up your bookkeeping entries, make copies on CDs, DVDs or memory sticks, and use your printer to make hard copies.
Check records at the end of the week even if using computer software. Software will only be accurate if the information it’s been given is. Mainly, check all receipts against the actual bookkeeping figures. This may seem unnecessary, but it’s a way of giving added peace of mind.
Categories for Expenses
Divide your expenses into categories, rather than using one all-enveloping section. For example, office supplies can be one category, advertising another. Don’t add too many categories, though.
Using software to help with bookkeeping is advisable for businesses. It will improve the efficiency of the business as a whole and will be money well spent.
James Bentham is writing on behalf of Iris Exchequer, who specialise in financial software. He has been creating web content for over 6 years and particularly enjoys covering business/technology topics.