When you run a small business, you want to focus on following your passion. Unfortunately, all of those pesky back-office tasks still need attention.
Keeping your accounts balanced is the single most important thing you can do for your business, so don't neglect it. Once you have a perfect system, you'll be on your way to success.
All of the steps below take less than five minutes:
Minute #1: Capture Those Receipts
You get a receipt for a key business expense, and you keep it in your bag, wallet, or binder to file later, right? Wrong!
Use a receipts tool to immediately store your receipts online. Basically, you'll be able to snap a photo of a receipt with your phone and send it in. This way, your receipts will be organized by date, and searchable. [pullquote]It’ll save you (or your accountant) hours that would have been spent searching and organizing.[/pullquote]
Members of the Wave Pro Network, our network of accountants and bookkeepers, constantly share stories of small business owners coming in with the dreaded shoebox full of receipts. Since these receipts lack key details, such as what the expense was bought for, they may be miscategorized. The time spent categorizing receipts can cost business owners significantly— money that would have been better spent getting insightful financial advice from that same accountant.
If you’re looking to really streamline your processes, you can use a receipt tool that pairs with an accounting tool. This way, you can categorize your receipt on the spot, while you still remember why you made the purchase. Your receipts will also be tied right into your accounting records for easy access, in case of an audit.
Minute #2: Give Your Accounting a Jumpstart
If your accounting system relies on hours pouring over a spreadsheet, or getting frustrated with your accountant at the end of the year when he asks questions about your post-it notes, bags of receipts and bank statements, there’s a better way.
Connect your bank account to an online accounting system. Then, watch as the magic happens. All of your expenses will load automatically.
This is particularly important if you’re not in the habit of downloading an editable bank statement every month. Some banks will only release up to three months of historical data. This means that if you wait until the end of the year to organize your financial information, it might become a challenge just to access the information.
The other key here is that if you do opt to download bank statements, they should always be in an editable format. PDF’s can’t be plugged into software or spreadsheets, meaning you’ll spend hours copying that information over unnecessarily.
When you connect your online banking to an online accounting system, your information will already be right where you need it. That means you’re well on your way to organized accounting — in only two minutes.
Minute #3: Create Track-able Invoices
So you’ve taken the first step, and started creating invoices for your customers instead of just asking for a check. Good? Absolutely, but you can do more.
If you’re using an invoicing template builder, you’re on the right track — professional looking invoices are key. Unfortunately, with template builders you’re still responsible for tracking everything related to your invoice. Have you collected a deposit? If you’re collecting partial payments, when are they paid? And how are you alerting yourself if the invoice becomes overdue?
Instead of using a template builder, use proper invoicing software. You’ll still get professional looking invoices, but you’ll also easily be able to keep track of those invoices and get better insights into who’s paid, when payments were made, what invoices are overdue, and with some software you can even see if your customer has viewed the invoice.
To go the extra mile, find an invoicing tool that integrates with an accounting tool. This way, your accounting will be automatically updated when invoices are paid.
Minute #4: Start Accepting Credit Cards
A few years ago, high fees and stressful set-up processes barred small businesses from accepting credit cards. Now, it’s never been easier.
Whether you sell products online or in person, there are solutions designed to make accepting credit cards easy for anyone. Fees have consistently dropped, and it’s now incredibly affordable to accept credit cards, as long as you work with a credit card processor that keeps small business owners in mind.
In fact, accepting credit cards has become so easy that you can now have your application to accept credit cards completed in less than four minutes!
Minute #5: Organize Your Transactions
One step left — organize your transactions. Jump into that online software you connected your bank account to, and organize your expenses.
When you organize transactions early, you won’t end up stuck, trying to remember if a restaurant bill was for date night, or a meeting with a new client. Do this every few weeks, and you’ll save yourself hours of time and frustration come tax time.
Free Software That Can Help
All these tasks seem daunting, but there are a number of tools that can help. For free software that does all of this and more, check out Wave at WaveApps.com.