Small business owners often dedicate about 10 hours a week to managing financial transactions – everything from handling accounts payable and receivable, to employee payments, expense receipts, and supplier invoices. Though it may seem tedious and time-consuming, effective bookkeeping is essential to maintain the financial health of your business.

If you’re daunted by the prospect of complex calculations and vast amounts of paperwork, here are three key bookkeeping tips to help secure your small business’s financial future.

Consistently Monitor Expenses

Keeping track of your expenses accurately and consistently is vital for claiming tax deductions and reducing your overall tax bill. Additionally, assessing your expenses can reveal important information about spending habits and the profitability of your small business.

Consider utilizing a mobile app for straightforward, consistent expense tracking. Apps like Expensify and Receipt Bank replace manual data entry with automated functions, such as:

• – Capturing receipt data via your smartphone’s camera (eliminating the need to keep paper receipts);
• – Using your phone’s GPS to record business travel mileage;
• – Importing bank and credit card data, along with integration with accounting software.

Effective Invoicing and Record-Keeping

Efficient invoicing is more than just securing prompt payment. Each invoice is a formal record of transaction terms and needs to be filled out accurately to prevent bookkeeping errors.

Here are some tips for professional invoicing:

• – Make sure to include all vital details in each invoice: contact information, tracking number, a detailed list of products or services provided, and a breakdown of the total due;
• – Offer an electronic receipt to minimize waste and provide a record in case of a dispute;
• – Maintain an invoice record system that tracks when and to whom you sent the invoice, payment dates, and any reminders sent.

An online invoicing tool can simplify this part of your bookkeeping process and provide a useful backup filing system.

Utilize Accounting Software to Save Time

By law, every business must maintain timely and organized financial records. However, manually logging income and expenses into ledgers and journals is both stressful and time-consuming.

Save time and reduce stress by employing an all-in-one accounting software solution like Xero, HubDoc, Plooto, and Rotessa

Key Features of Xero:

• – Pay Bills: Track expenses and make timely payments while gaining insights into payables and cash flow.
• – Claim Expenses: Capture costs, submit and refund expense claims, and track spending using expenditure management tools.
• – Accept Payments: Connect with payment processors like Stripe and GoCardless to accept online payments and accelerate cash inflow.
• – Track Projects: Quote, invoice, and manage jobs effectively, including monitoring expenditures and profits.
• – Sales Tax: Automatically calculate appropriate taxes for transactions to facilitate GST/HST filing online.
• – And more.

HubDoc for Automation:

HubDoc simplifies the capture of financial documents through various methods such as smartphone image capture, email submission, scanning, and document uploading. It seamlessly integrates with Xero by extracting essential information from bills and receipts, allowing for easy transaction creation in Xero and QuickBooks Online. HubDoc also provides immediate access to bookkeeping records for accountants, facilitating up-to-date record keeping.

Plooto for Accounts Payable:

Plooto offers a simple and secure solution with automation and intelligent workflows to streamline accounts payable operations. It unifies payments, processes, controls, and reporting, enabling automation of domestic and foreign accounts payable and accounts receivable tasks. Plooto integrates with Xero and QuickBooks via a two-way sync, automatically syncing bills, invoices, and payments while maintaining a complete audit trail. The platform optimizes cash flow by accepting credit cards and offers features like PAD and recurring payments for faster and more effortless transactions.

Rotessa for Accounts Receivable:

Rotessa is an online payment system for small businesses in Canada, allowing customers to pay using any bank or credit union if they have a bank account. Rotessa enhances customer experience efficiencies and provides payment solutions through pre-authorized debit and integration with online accounting platforms like Xero and QuickBooks. It simplifies the payment process, eliminating the need for customers to figure out the most efficient payment method or contact the business for payment details.

Online bookkeeping provides numerous benefits, including:

• – Immediate reports and real-time insights on profits and loss, customer accounts, payroll, and your overall financial outlook;
• – Simplified data entry that allows you to compile and print invoices, purchase orders, and payroll faster than with manual methods;
• – Enhanced accuracy through automation (once data is input, the software manages all subsequent calculations and processes, including invoicing).

Remember, the key to successful accounting is attentiveness, which mitigates risk and ensures the long-term profitability of your small business. Make sure to allocate time daily, weekly, and monthly to update and review your books, detect any issues early, and ensure your finances are on the right track.

Still need help? Reach out to our team at Kedden to discuss the best options for you!