Those paying for bookkeeping services should aspire to be the best possible clients. How do you improve as a bookkeeping client, though? The best clients tend to develop these 5 habits.
Segregation of Funds
Although there are cases where a self-employed person without a company can intermingle personal and business funds, it's a bad habit. Once you incorporate a business like an LLC or S-Corp, it is just flat-out unallowable.
The solution is to segregate your funds. Stow your money in clearly defined personal and business accounts. Have the business pay you regularly either as an employee or a shareholder.
Segregating funs avoids the appearance of using the business as a piggy bank, and it also makes it easier for a bookkeeping services provider to track everything. If a certain amount of money comes out of the business and appears in your personal account, it makes more bookkeeping sense as a paycheck, dividend, or disbursement.
Receipts
You always want to have the chance to write off as many expenses as possible. To do that, you need to have a detailed trail of receipts. Make copies of your receipts so you can place them in a folder for when you need to do taxes or reconcile the books. If you're not sure if something is an acceptable expense, keep a receipt for it, and ask the company that handles your bookkeeping. You will always be better off keeping more receipts than not holding onto enough.
Use Software
It's tempting to try to save money by doing books by hand or keeping them in a spreadsheet. However, it creates more work down the road. Ask your bookkeeper which software suite they prefer to use. Keep all your files in the same digital formats as theirs so you can easily email whatever they require.
Schedule Entries Regularly
Whatever the pace of your income is, make bookkeeping entries relative to that. If you have a business that turns over money daily, then take 15 minutes every day to put stuff in the books. Businesses that have less frequent payment flows, such as freelancers that might have one or two payments a month, should enter numbers as soon as checks come in.
Produce Reports
You'll never know the state of your business if you don't measure it. Once every quarter, produce reports using your software. Look at your balance sheet, and make sure it makes sense. Look at profits and losses so you can identify potential problems early.
For more information, contact a bookkeeping service in your area, such as Datafunds.
Unfortunately, personal finance is not a subject that is widely taught in schools. And yet, to be a functioning adult in society, you need to know the basics about earning money, saving money, taking out loans, paying interest, and so forth. Money makes the world go 'round, and you won't get very far in the world without a basic money education. There are many ways to learn more about money, from reading books to visiting a personal financial advisor. You can start by reading some of the articles on this blog, which address a wide range of financial topics for people in every situation.