A business, regardless of its location, size, or niche, needs to have strong bookkeeping policies and procedures. Bookkeeping allows a business to be more informed about its financial health, save time and effort during tax season, keep investors in the loop, and steer the business away from facing any legal problems.
Even if you’re still managing a startup business in another continent such as Africa, for example, bookkeeping should be one of the first things your business should establish. But how exactly can you maintain your business’s books? How can you make sure that these bookkeeping practices can be used by everyone in the business for the long term?
Let this article show you how.
Open a bank account for your business operations:
Having only one bank account for both your personal and business earnings might seem convenient, but this will actually create a lot of problems down the road. As early as possible, have two bank accounts – one for your personal finances and another for your business. Doing this will make it easy for you to keep track of the money that goes in and out of your business and help you determine your available resources. Once you’re well informed of the amount of money you have, it’ll be easier for you to prepare a budget for your business operations.
Allocate time each week solely devoted to bookkeeping:
Business operations can get overwhelming at times, especially when you’re operating in foreign lands. You might have to juggle your time between hiring employees, looking for suppliers, and working with marketers.
And while all of these things are important, you shouldn’t take for granted your bookkeeping needs. You or the team who handles the business’s bookkeeping should always allocate time each week solely dedicated to bookkeeping. The more frequent your books are reviewed, the easier it’ll be for your business to control the cash flow and determine financial problems.
Use an accounting software that fits your business’s needs:
Manually inputting financial data into an excel sheet is probably one of the oldest tricks in the book when it comes to bookkeeping. With the advent of technology, this is already a thing of the past. Today, accounting software has been made for business use – and with the variety of software available today, you can definitely find one that will suit your business needs.
- For example, if your business is involved in manufacturing and selling automobiles in Africa, look for an accounting software that has an inventory feature so you can monitor your available stocks.
- In choosing an accounting software for your business, pay attention to its security features as well. Does the software offer any firewalls? Does it secure storage facility? Does it encrypt all of your business’s sensitive data into a database? Using an unsecured accounting software can make your business susceptible to data theft or data alteration – and you don’t want these to happen, right?
- Since there are several businesses that offer accounting software, scout for at least three options and compare their services and prices. Assess the pros and cons of each of your options, and choose one that you think is the perfect fit for your business’s bookkeeping needs.
Determine your tax and compliance obligations:
Facing any lawsuit that involves your business is not only time consuming – it’s also very expensive and stressful. In worse cases, a lawsuit can cut short or limit the operation time of your business. If you don’t want this to happen, know your tax and compliance obligations. These obligations vary depending on where your business is operating.
- For example, operating a business in South Africa will require you to have South African Revenue Services (SARS) and Department of Labour and Unemployment Insurance Fund You also have to pay for employment tax and VAT vendor.
- If you’re starting a business locally or abroad, take time to know the legal requirements of the country. Ask the authorities from these countries, and prepare these documents ahead of time. Your compliance with the legal requirements will guarantee that your business will operate smoothly for the longest time possible.
- Once you know what is required from your business, it’ll be easier for you to come up with bookkeeping systems that can help you to stay compliant. It’s also important that your employees should also know about these legal requirements so everyone in the business will be on the same page.
Periodically assess your methods:
The bookkeeping practices and processes you have today may no longer be effective after two or three years.
Keep in mind that as your business grows, your bookkeeping needs also change. This is the reason why you should also periodically assess your bookkeeping methods. If you think there are certain areas that need to be adjusted, go ahead and do it. Your bookkeeping system should be flexible so you can still have room for improvements in the future.
Outsource a bookkeeper:
If you think you don’t have the time to personally handle your business’s bookkeeping needs or you don’t have enough manpower to do it, outsource a bookkeeper.
There are a lot of businesses that offer professional bookkeeping services, such as Balancing Books Bookkeeping. Working with them is a cost-effective solution since you’ll be at ease knowing that your business’s bookkeeping is handled by experienced and trained professionals.
First Things First
Aside from coming up with new products and services for your customers, bookkeeping is vital to your business’s success. The amount of time and effort you exhaust for your bookkeeping can significantly impact the longevity of your business. Let this article be your guide so you can finally jump-start and maintain your business’s books better.