Managing a small business is full of responsibilities and one of the most daunting and important, is to manage your finances. Whether you are just starting a small business or you are already running one, a good bookkeeping is very important to keeping your business on the right track.

The good news? You don’t need to do this all by yourself. It’s not that hard though; follow a few key strategies and with the assistance of bookkeeping services in Surrey, you can streamline the process, keep mostly out of trouble and give you more time to dedicate towards growth.

What is Bookkeeping? And Why Bookkeeping Is Important?

Bookkeeping is a basis of your financial business. Its process includes capturing and organizing all monetary movements such as earnings, spending, payrolls and taxation tasks.

When it’s done properly, bookkeeping provides a clear overview of your cash flow and enables you to make smart, data-driven decisions. It also gets your business out of the audit woods and ready for tax time and growth to come.

Spending on tools such as Quick Books or Xero, or outsourcing to professional help , can be a way to save yourself time and reduce mistakes. These days, most small business owners work with virtual accountants or other surrey bookkeeping services to perform these vital duties correctly.

How to simplify your bookkeeping. Some things you can do to cut down the work involved include: 

A reliable bookkeeping system is a good way to avoid making expensive mistakes, ensure you meet your obligations, and ensure that your business remains financially sound. Here are seven practical ways that can help you keep your bookkeeping efficient:

Once you’re successfully running a business, pay continued attention to invoices, billings and cash flows.

Keeping track of bills and customer invoices is critical to keeping your cash flow healthy. Develop a good tracking system in the accounting software of choice regarding due dates, payment amounts, and respective vendor information.

Send the bills right when you deliver your product or service so you don’t wait to get paid. Send professional templates that explicitly detail the outstanding amount, payment due by when, your business details.

Keep Good Records: Track Income and Expenses Regularly

Standardize for recording all transactions. Whether you’re working with a spreadsheet, cloud-based software or apps you can use now, ensure you categorize all income and expenses correctly.

With consistency, you will be able to compare your financials month by month and recognize trends. Better still, have a virtual accountant or bookkeeping services Surrey specialist manage the tracking for you, saving time and improving accuracy.

Monitor Cash Flow

Your business’s lifeblood is its cash flow. By regularly monitoring cash inflows and outflows, you can anticipate when you will need money, plan accordingly and make smarter business decisions.

Leverage dashboards that portray cash flow trends or seek the help of a third-party bookkeeper to interpret this information and provide guidance in real time.

Reconcile Your Accounts 

Get into a routine of balancing your business bank accounts every month. Otherwise, the aim here is that your recorded transactions reflect the transactions on your bank statement (I.e., you can spot check errors, missed payments, or all-out fraud). 

Review P&L Reports.

If you're checking the P&L regularly, you'll have a good idea about whether your business is in good financial condition. Focus on these key metrics: 

Gross Profit Margin: Indicates how well you are doing at production and sales. 

Operating Profit Margin: Indicates operational efficiency (a higher number means the company is more efficient at operating, thus using its resources), return on sales.

Net Profit Margin: This will show a very quick picture of how profitable you are (your profitability after all the costs and taxes).

Monitoring these numbers on a monthly or quarterly basis will enable you to tweak your pricing, reduce costs, or snap up growth opportunities as they arise.

Get Ready for Tax Time All Year Long

Don’t get caught in the last-minute tax scramble keep your financial records current all year long. When you have accurate, organized bookkeeping, your tax filings will be quicker and more reliable, and you’ll be equipped to take advantage of deductions. 

By working alongside bookkeeping services Surrey-based experts, you can also be sure to remain compliant with the changing tax legislation, particularly when it comes to the implementation of Making Tax Digital.

Think about Hiring Bookkeeping Help

If bookkeeping is sapping your time or energy, it’s a wise investment. Bringing in a virtual accountant or utilizing local Surrey bookkeeping services means you get financial expertise without having to hire someone full-time.

Let an outsourced service handle the day-to-day transactions as well as year-end reports so you can continue to expand your business with confidence. 

Final Thoughts

Bookkeeping is not the sexiest aspect of business management, but it doesn’t make it any less important. Armed with the right tools, systems and support such as the professional bookkeeping services Surrey business owners trust you can streamline your operations, get a grip on your finances and set your business up for long-term success.