Top Bookkeeping practices for an ideal financial management

If you are running a small or medium sized business, then a proper and effective bookkeeping plays a key role in running your business smoothly. But most of the startups and entrepreneurs, ignore this vital aspect of financial management and when the tax season comes around, they had to face problems, hurdles and sometimes, legal penalties as well. Not only for a proper financial management but even by law, maintaining records on a daily basis is necessary. That’s why a proper bookkeeping becomes important for not only an effective financial management but for staying out of trouble with Internal Review Service as well.

But with few bookkeeping tips and routine practice, you can get a better hold on your transaction details which will not only help you during the tax season, but will also assist you in making better financial decisions and planning.

So, in this article, we will be looking at the top bookkeeping practices for an ideal financial management.

Use the cloud

Most of the accounting software have the fully functional features for a proper Bookkeeping and hosting such software on cloud gives you several advantages. One such solution for proper bookkeeping is QuickBooks hosting. Bookkeeping on cloud wipes out your chances of data loss as all the data is stored on cloud with proper backup. You can also access your bookkeeping from anywhere and at any time. There are various templates for small business which are provided in the accounting software, like deposit slips, business account check printing and invoices.

Keep your private transaction separate from your business transaction

The accuracy of your accounting details depends on the number of accounts you are dealing with and that’s why it is advisable to keep your private transactions separate from your business transactions, so that you can be much more accurate while dealing with one type of account. In addition to increased accuracy, you will also be able to save a lot of time by keeping these accounts separate.

Double check your records and reconcile bank accounts on monthly basis

You should double check your bank accounts and transaction on monthly basis, so that if there is any mistake, then you can fix it before it gets piled up when the tax season arrives. You should also reconcile your withdrawals and deposits, which will help you to spot any type of discrepancy with much more ease.

 Keep aside the money for paying taxes

With a better financial management, you will be able to plan your taxes better and based on those estimates, you need to keep aside money for paying taxes. It will minimize your burden of arranging money on instant basis. You should also note the tax paying date and set reminder for avoiding any hassle.

Set time for weekly review of your books

You should decide a fix date for every week, on which, you will review your books. Having a dedicated date and time for reviewing your books will allow you to keep everything in order.

Bookkeeping is an important part of a business and if you are a startup or an SME, then it becomes vital for you to have a proper bookkeeping. A proper bookkeeping allows you to have a detailed and accurate data of your expenditure, invoices and many other financial aspects. Follow the above mentioned tips and maintain an effective bookkeeping for better financial management.