Back to the Bookkeeping Basics
Businesses across the country are giving a whirl at reopening, or attempting to go back to “normal” by opening their locations for staff, clients, and customers. It’s no secret small and mid-size businesses have been hit hard by the COVID-19 pandemic, resulting in a country-wide shutdown for businesses. Owners were forced to adapt, and are still determining and learning the best practices to follow. As we as a whole try to find our bearings in getting our businesses either back up and running, or maintaining a healthy flow, it’s going to be important not to get lost in the complexities of running, tracking, and analyzing the financials of your business. We would like you to focus on the basics of bookkeeping as you get your business back to where it was, and beyond.
Track your cash. There is no way to track the cash you spend unless you do it yourself. Make sure you keep receipts when cash is spent and log them that day or the next so your books are as accurate as possible.
Log your accounts receivable and accounts payable on a daily basis while things get going. This will help you send timely and accurate invoices/bills to customers/clients who owe money, and ensure your bills are paid on time, not repeated or missed.
Keep accurate records of your inventory. Assuming you’re only spending where necessary, your inventory list will come in handy when looking to see if the business is in need of any supplies or equipment. Don’t spend money on things you don’t need.
Log the amount of money you put into your business. This is called owner’s equity, and it’s important to track.
Check your payroll expenses before pay day to make sure you have enough money in your account to cover payroll. This is usually the most costly portion of a business.
To make it through these challenging times, you’ll need a guiding light, and that will be your bookkeeping. It will tell you where your money is going, where it’s coming from, and what the future could look like if things continue the way they are. But this will only happen if you keep up with your books on a day-to-day basis, so you’re making informed decisions for your business.