As a small business owner, you have a lot on your plate, and it can become easy to neglect your books. Lots of small business owners view bookkeeping as a weight over their head—and come tax season, this weight becomes tangible.
In order to file accurate returns and get the highest deductions, your books need to be in pristine condition. If you regularly schedule and prioritize bookkeeping, tax season can be much less stressful than it would be otherwise!
In fact, keeping up with best accounting practices can help you maximise your productivity year round. Here are four simple tips to do just that:
1. Get your head in the cloud
Cloud-based applications are the norm in business today—so hopefully you’ve learned that there is nothing to fear. Cloud accounting solutions can increase productivity in small businesses through improved functionality and accessibility.
When comparing cloud-based accounting products to their desktop alternatives, there are some obvious advantages:
- Security: With encrypted connections and digital backups on the cloud, there’s no risk of misplacing records or documents.
- Accessibility: Access the cloud any day, any time, from any device with internet. Most software providers will also offer a mobile accounting app.
- Price: Cloud-based solutions tend to be more affordable than desktop alternatives, typically with subscription-based pricing and no cancellation fees.
- Collaboration: The security and accessibility of the cloud makes it easy to collaborate with multiple team members from one central location; you can even add accountants and other professionals.
- Updates: Cloud accounting software updates continuously, in real-time—you don’t have to wait for the annual improvements or lengthy installations. This is one of the main reasons why QuickBooks has been shifting focus from desktop to online.
If you haven’t already moved your accounting to the cloud, it’s probably time .
2. Automate wherever possible
Having the right tools for your business is essential for productivity. If you can identify opportunities for automation, you will save your business valuable time and eliminate human error.
Because cloud-software is run online, there are lots of great options for automation. You can seamlessly integrate many third-party applications like those for payroll and customer support. You also have access to digital payment options like Square, PayPal or electronic bank transfer.
Many accounting products also combine accounting and digital invoicing in one, helping you to stay on top of accounts receivable. It can even remind you about any unbilled time and sends automated reminders to customers with outstanding invoices.
Additionally, the task of reconciliation can be made simpler with auto-categorisation and error tracking. Accounting solutions that utilise machine learning (like Xero or my company, ZipBooks) automatically highlight areas of concern and suggest categorisation options, saving you time and eradicating inefficient workflows.
3. Set Measurable Accounting Goals
One of the best ways to be more productive is to set some tangible goals. You probably already have business goals in place and a powerful vision as your driving force.
Since accounting isn’t usually the most exciting part of entrepreneurship, it’s unlikely you’ve set goals in this area. However, your books can be the strongest indicators of financial growth—and it’s important that you mind them.
While this may sound counter-intuitive, you will actually be more productive if you schedule bookkeeping more frequently.
The older transactions get, the harder your accounting will be. It’s increasingly unlikely that anyone remembers what each transaction was for, meaning that you could miss out on valuable write-offs or overpay on your taxes. Commit to regularly maintain your books and the task will only take a few minutes here and there rather than hours or days at a time.
Once you’ve got updated books, do something with them! Most accounting software products will generate automatic reports for you; view these reports and analyse them on a regular basis to inform smarter decision-making for your business.
4. Consider Outsourcing
If your business has grown, good for you! It may be well worth your time and money to invest in professional bookkeeping or accounting. Especially if your books are a source of anxiety, handing them off to a professional could be a great productivity boost for you and gives you more time to do what you love.And remember, outsourcing your books doesn’t mean outsourcing responsibility. You should still be involved in your accounting and know what’s happening with your numbers, even if someone else is managing them.
Improving productivity in your business can be the difference between success and struggle. If you want tax season to be a breeze and your business to grow more efficiently, consider implementing these 4 simple accounting hacks.