Top 15 bookkeeping and accounting tips that’ll make you feel like a BAB
Top 15 bookkeeping and accounting tips that’ll make you feel like a boss-ass-bitch (or BAB, as we like to call it) in no time
Are you a small business owner tired of feeling like a hot mess when it comes to your finances? Grab a glass of wine (or whiskey, we don’t judge) and get ready to feel like a boss-ass-bitch (BAB) in no time. We’re about to drop some knowledge that’ll have you handling your money like a pro. So, buckle up, buttercups; it’s time to get serious about our bookkeeping and accounting game.
Let’s be real; accounting and bookkeeping are about as exciting as watching paint dry. Who wants to spend their time doing math when they could be traveling the world or taking a nap? We get it, but it’s important stuff. That’s why we’ve put together this list of tips for keeping your books organized and up-to-date. So read on, BABs, and get ready to outsource those tedious financial tasks so you can focus on more important things.
1. Get Organized:
Like, now. Like yesterday. Like, why the f*ck haven’t you done this already? Organizing your receipts, expenses, and bank accounts is an important part of being a good bookkeeper/accountant. If you don’t know what’s happening with these things, how can you keep track of them? Keeping track of all these things will prevent mistakes from happening in the future and make life easier. Plus, using technology such as apps and software can help streamline the process.
2. Keep Your Business and Personal Expenses Separate:
Don’t be a dummy and mix business and personal expenses together. Business expenses are tax-deductible, while personal ones usually aren’t. By keeping a separate account for your business and not mixing the two, it’s easy to see what goes into each column: business expenses are any expense that furthers your work as an accountant or bookkeeper, and personal expenses are anything related to leisure or recreation (gifts, food on dates). This simple rule can save you from losing a lot of money in taxes down the line!
3. Keep Track of All Your Receipts:
You never know when you might need them for tax time, or if there’s an issue with your credit score because of unpaid bills, or an issue with an insurance company about the payment (like if your car gets rear-ended and they won’t pay for repairs unless they see proof that it was their fault). So, be like us and keep receipts for everything, even small purchases like gas and coffee.
4. Have a System for Invoicing:
Invoicing may not be rocket science, but it’s important to have a system in place. Make sure your invoices include all of the essential information that a business owner needs: recipient’s name and address, bill number (if applicable), invoice date and due date, an itemized list of items/services purchased by the customer with prices (including tax), purchase order number (if applicable), payment terms (e.g., net 30), and discount offered (if any) – and don’t forget to sign it! Send invoices at least once every two weeks and more frequently if possible. If an invoice comes back unpaid, send a reminder immediately after receiving payment confirmation from your client. If they still haven’t paid after four reminders have been sent out without a response from them within thirty days, it’s time to take further action.
5. Understand The Difference Between Cash and Accrual Basis Accounting:
It’s important, trust us. Cash accounting is the most basic and straightforward method of bookkeeping. It tracks only transactions involving cash and, therefore only records revenue when it has actually been received.
Accrual basis accounting is a more complex system that takes into account all transactions before they are paid for or received in full. This means that the revenue from a sale could be recorded before you ever receive payment for it—and if something goes wrong with one of your customers’ payments, you could find yourself waiting months to get paid while still having to pay all your own expenses upfront, like rent and salaries.
6. Use Accounting Software:
Because who wants to do all this sh*t by hand? I’m sure you’ve heard that accounting software is a must-have for any business, but did you know that it can also save time and money? Accounting software can help you avoid mistakes, track your finances, manage your business and keep track of your expenses — all in one place. The best part is that most of the programs available will sync with each other so that when something changes in one place, it automatically updates across all accounts.
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- Wave is a free option that’s great for small businesses just starting out.
- QuickBooks is a low-cost option that’s perfect for businesses looking to upgrade from spreadsheets.
- Xero is a splurge option worth it for businesses needing advanced features and integrations.
7. Stay On Top Of Your Accounts-Payable and Receivable:
Seriously, don’t be a slacker. You don’t want to get caught with your proverbial pants down when it comes to accounts payable and receivable. There is nothing worse than having late payments or bad debt on your books—it’s embarrassing and stressful, not to mention that it can ultimately affect your company’s bottom line if left unchecked for too long.
But don’t stress, babe. There are plenty of ways to stay on top of these things without falling behind. Set reminders, automate payments and invoicing, and stay on top of your email and phone calls. And if all else fails, don’t be afraid to get a little aggressive with those deadbeat clients. Because let’s be real, nobody has time for that sh*t.
8. Keep Good Records Of Your Inventory. You Don’t Want To Be Caught With Your Pants Down When It Comes To Taxes.
Imagine if you were a business owner with a warehouse full of inventory, and you realize that there’s $40,000 worth of inventory missing from your books. Not only will this make it difficult for you to do accurate financial reporting, but it could also lead to serious issues with taxes and audits. Keep good records of your inventory so you don’t get caught with your pants down at tax time.
9. Understand And Track Your Cost Of Goods Sold. It’s Key To Determining Your Profit Margin.
It’s a critical metric for any business, but in some industries, it can be even more important than others. For example: let’s say you own an artisanal whiskey distillery. Your cost of goods sold is going to be the total cost of bottles sold—and if you’re working with glass bottles, those things aren’t cheap! You’ll want to make sure that every single penny from that bottle goes toward covering your costs so that when you finally close up shop for good, there will remain some profit margin left over for yourself (or your heirs).
Have A Solid Budget In Place.
To avoid overspending and getting into financial trouble, you need to have a solid budget in place. And when I say budget, I don’t mean some half-ass, wishy-washy plan. I mean a real, set-in-stone, take-no-prisoners budget.
First things first, you need to sit down and actually make a budget. I know it sounds like a total drag, but trust me, it’s worth it. Once you’ve got that bad boy all setup, you need to stick to it like glue. No excuses, no exceptions.
But here’s the thing, life happens, and things change. That’s why it’s important to review your budget regularly, like every month or so. Make sure it’s still working for you and adjust as needed. Don’t be afraid to make changes; it’s better to do that than to pretend everything is all good and end up in a financial sh*t show.
Bottom line, budgeting is key to keeping your finances in check. So, don’t be a lazy ass and put it off; get that budget in place and stick to it as your life depends on it.
10. Stay On Top Of Your Taxes. No One Likes Surprises, Especially The IRS.
It’s true: no one likes surprises, especially the IRS. To avoid being surprised by an unexpected tax bill, it’s important to understand your tax obligations and make sure you pay any due taxes on time.
Even if all this sounds like something that would require some legwork on your part, don’t wait until April 15th rolls around before thinking about how much money needs to go where and when! The earlier in the year that can be accomplished means less stress during crunch time at work when everyone else is running around trying desperately to file their own returns and to figure out why their clients’ payments were late (again).
11. Understand The Damn Difference Between A Debit & Credit. You Can’t Call Yourself A Boss-Ass-Bitch If You Don’t.
You can’t call yourself a BAB if you don’t understand the damn difference between debit and credit. It’s that simple. But it’s also not that simple because there’s actually more than one way to use them. There are three main types of transactions:
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- Debits increase assets or income, and credits decrease assets or expenses
- Debit entries also increase equity, while credit entries decrease equity (this is mostly for balance sheet purposes)
- A debit increases net worth by $x dollars, while a credit decreases net worth by $x dollars
12. Hire A Professional If Needed. It’s Not Weak To Ask For Help; It’s Smart.
If you’re still not comfortable with the accounting process after reading this article and doing some research on your own, consider hiring an accountant to do it for you. The more often you do the work yourself, the better you’ll get at it (and who doesn’t want to feel like a boss-ass-bitch in no time?).
A professional can also help you set up systems and processes so that your paperwork won’t be such a hassle next year. If they’re also good with tax preparation (which they should be), they can even take care of that as well! Plus, if they’re good at financial planning, they can advise on how much money will be needed over time in order to reach certain goals or maintain certain lifestyles.
13. Keep All Important Financial Documents In A Safe Place. Don’t Be An Idiot And Lose Them.
While you may be the best at what you do, no matter how careful or organized you are, it’s still possible to lose important documents. Whether it’s a tax return or a handwritten receipt from your favorite restaurant if it has financial information and isn’t backed up elsewhere, having multiple copies of it is a smart-ass move.
14. Review your financial statements regularly. Know your numbers and make informed decisions.
If you wanna be a boss-ass-bitch (or BAB) in the world of business, you have gotta know your numbers. And the only way to do that is by regularly reviewing those financial statements. Don’t have the time or expertise? Hire an accountant; they’re the experts for a reason. But, if you’re feeling confident, start by reviewing them monthly, then quarterly, and finally, annually. It’s a no-brainer, stay on top of your finances and make informed decisions like the BAB you are.
In conclusion, you’ve just been schooled on the essential bookkeeping and accounting tips for small business owners. By following these tips, you’ll be able to handle your finances like a boss without feeling like you’re constantly pulling your hair out. Trust us; you don’t have to be a financial wizard to keep your books in order. Just remember to separate business and personal expenses, keep track of all your receipts, invoicing and understand the difference between cash and accrual basis accounting, use accounting software, stay on top of your accounts payable and receivable, understand and track your cost of goods sold, have a solid budget in place, stay on top of your taxes, keep good records of your inventory, review your financial statements regularly, and if you’re in need of help don’t be afraid to hire a professional.
Now, go out there and show the world that you’re a boss-ass-bitch and dominate the world of bookkeeping and accounting like the boss you are.
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