Essential Bookkeeping Practices

Essential Bookkeeping Practices You Should Follow

Owning a small business comes with many challenges, including managing your finances and keeping track of receipts, expenses, and more. Even if you use software or have bookkeeping services, it’s important to establish good accounting practices.

Here are some essential practices for small business bookkeeping in Mesa to keep your business running smoothly and profitably.

Separate Your Personal and Business Expenses

You should always clearly delineate your personal and business expenses. While occasional use of your personal account to pay a business expense or putting a small purchase on your company credit isn’t a big deal, regularly mixing your personal and business expenses can become a problem quickly.

Establish Controls

If you give your employees any responsibility in managing your business finances, make sure that there are internal controls. For example, the employee writing business checks should not be responsible for reconciling the accounts. Hiring an accounting firm for bookkeeping services in Mesa can help if you don’t have a big enough team.

Reconcile Your Bank Accounts

You should compare the register in your accounting software to your bank balance. Utilize the reconciliation feature to catch duplications or circular transfers.

Keep Track of Automatic Bank Downloads

Automatic transaction downloads are available with accounting software to make things easier and more efficient. However, those transactions can pile up, and it’s challenging to classify hundreds of transactions after they accumulate. Make weekly or monthly bank download classification part of your process.

Review Payroll and Tax Notices as They Come In

There can be a lot of unnecessary paperwork and email that comes in, so you could miss important payroll or tax notices. It’s important to pay attention to notices to ensure you don’t miss any important information like updates or deadlines. If necessary, set aside time each day to quickly look over these notices.

Keep Detailed Payable and Receivable Records

Even if you have digital copies of your payable and receivable records, keep the hard copy originals. If there’s ever a question or dispute over an invoice or other paperwork, these documents will be invaluable for clearing it up.

Review Financial Reports

Income statements and balance sheets should be reviewed regularly, at least once a month. Together with other financial information, this allows you to compare different periods to analyze trends and keep an eye on the health of your business.

Obtain Form W9 from Contractors

Form W9 has all the information about contractors, including a name, address, and tax ID number. Having this information readily available makes it easier to prepare a 1099Misc or 1099NEC form at the end of the year.

Meet with Tax Professionals for Tax Planning

Small business bookkeeping services can help you review your business goals and ensure that you have internal controls and processes in place. Your bookkeeper can help you maintain accurate, updated books and financials.

Get Help with Bookkeeping Services

Even with the best practices, small business bookkeeping for Mesa businesses can be overwhelming. If you want professional help, M&M Accounting LLC offers bookkeeping services to manage your books and free your time to focus on your business needs. Contact us today for a free consultation!

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