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How to Simplify Your Bookkeeping

9/7/2021

 
Don't want to hire a bookkeeper ​or use outsourced Client Accounting Services (CAS)? That's okay. Here are some tips on how to simplify your bookkeeping if you are doing the bookkeeping yourself (hint: it's easier than you think). Be proactive, get organized, and create a simple system that works for your business.

1. Keep personal and business expenses separate

Suppose you're a sole proprietor or freelancer. In that case, it can be tempting to use a personal account for small business expenses like supplies or computer equipment that you'll deduct as home office expenses. However, it can take what feels like an age to separate out business expenses from personal items when tax season rolls around. Set up an account specifically for business expenses. A separate account will make things run a lot smoother. In addition, using this in tandem with accounting software can make tax season even easier to bear. Our overviews and reviews of accounting software is available on the website AccountingSoftwareWorld.com. 
 
Once you upgrade to an LLC (Limited Liability Company), you'll have to keep your personal expenses separate from your business expenses. Many sole proprietors choose to register as an LLC as this protects your personal assets if someone opens a claim against your company.    ​

2. Automate your invoices to simplify your bookkeeping

Sending out invoices can soon eat up a large portion of time each month. Switching to an AI-based automated accounts payable system can help cut the approval time of invoices by one fifth. You can still monitor the process at every stage but drastically decrease the time spent on verification and approval. Automation also makes it much easier to track payment cycle times, reduce duplicate invoice payments, and any other metrics you might want to measure.  Suppliers like AvidXchange, Bill.com, Corpay One, and Vic.AI each have unique offerings in this area. More options are listed at our website AccoutingSoftwareWorld.com in the Accounts Payable section. ​

3. Track and file all business expenses right away

Rather than collecting a pile of receipts to capture deductions, get into the habit of tracking and filing these as they occur. Some accounting systems will allow you to scan a picture of the expense receipt and upload it to be processed, or you can store them in the cloud for processing in a batch later. Products like Zoho Expense, Tallie, Expensify, Nexonia, Concur, and more are all options. For K2, we use Zoho Expense today after using Concur for years. 
 
It's good practice to keep hold of the paper receipts for auditing purposes but try to adopt a "touch it once" method. For example, take a photo, upload it, and file the receipt away as soon as you get a receipt. Dext and Hubdoc are classic tools for QuickBooks and Xero. ​

4. Use one payment gateway

If you're trying to keep track of multiple payment options, it can soon become extremely confusing when trying to reconcile your accounts. Having to trawl through check payments, cash payments, credit cards, and PayPal can feel like a huge challenge.  
 
Instead, consider switching to an all-in-one payment gateway, collecting all deposits through one channel. Then, when it comes time to reconcile your deposits, you'll save a notable amount of time!   ​

5. Keep your website up to date

Keeping your website up to date is just good business management. But it can also make bookkeeping much quicker and easier if you have an eCommerce store or online shop. In addition, using a headless Content Management System (CMS) can make it easier to keep track of payments from multiple platforms, including your traditional website, smartwatches, and any other platforms you use.  
 
A headless CMS also makes it easier to update or add new products, helping you reach your customers quickly and hopefully increasing sales!  ​

Wrapping it up

Bookkeeping doesn't have to feel like a headache. Hopefully, these hints on how to simplify your bookkeeping, if you are doing the bookkeeping, yourself provide some action items. If you need help, consider Client Accounting Services. Further, by taking some time to simplify and streamline your systems now, you'll be thanking yourself when it's time to pay your taxes. 
 
Learn more about accounting software by choosing one of K2’s accounting software CPE courses, including the topics of accounting software, QuickBooks Online or desktop, small business accounting add-ons or in one of our Technology Conferences. ​

Randy Johston

virtual bookkeeping@ Bhargey link
1/5/2022 05:45:30 am

Great Post! Thanks for sharing the knowledge and keep up the good work.


Comments are closed.

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    Authors


    Ward Blatch
    Ward provides consulting and training services as the Managing Director of K2E Canada Inc. He joined K2E Canada in 2005 and is responsible for the Canadian operations of this international consulting group, which provides professional development technology education for accountants across Canada and the US. Ward lives in rural Nova Scotia and can be reached at ward@k2e.ca.

    Tommy Stephens
    Tommy is one of the shareholders in K2 Enterprises, affiliating with the Firm in 2003 and joining as a shareholder in 2017. At K2, Tommy focuses on creating and delivering content and is responsible for many of the Firm's management and marketing functions. Tommy resides in the metro Atlanta area. You may reach him at tommy@k2e.com.

    Randy Johnson
    Randy is a nationally recognized educator, consultant, and writer with over 40 years experience in Strategic Technology Planning, Accounting Software Selection, Paperless, Systems and Network Integration, Business Continuity and Disaster Recovery Planning, Business Development and Management, Process Engineering and outsourced managed services. Randy can be reached at randy@k2e.com


    Bernie Smith
    Bernie coaches businesses to develop meaningful KPIs and present their management information in the clearest possible way to support good decision making. As the owner of Made to Measure KPIs, he has worked with major organisations including HSBC, Airbus, UBS, Barclays, Credit Suisse, Lloyds and many more.

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