Keeping the books requires much attention and scrupulous work. In the case of freelancers and small business owners, this often becomes their responsibility.
The good news is that there are some lifehacks to simplify bookkeeping and save time for more exciting business ventures.
1. Separate Bank Accounts
It is highly advised to have separate bank accounts for business and personal needs. In this case, finding out the details of the desired transaction and reconciliation will take much less time.
Some businesses go further. They have bank accounts per function, e.g. for trading, payroll, corporate tax, each source of income (based locally or abroad), etc.
2. Speed Up Cash Flow
Keeping an eye on the cash flow is crucial for any business. When the difference between incoming and outcoming payments is too big, a company may suddenly find itself drained out of money. It is difficult to maintain or grow a business without liquid funds on the accounts.
The two tips to speed up the inflow of payments are:
- send invoices beforehand and automated follow-up messages ahead of the due date
- decrease your payment time gap, e.g. from 1 month to 2 weeks
3. Stick to One Payment Solution
There are various ways a company may receive payments: cash, checks, cards, payment platforms (e.g. PayPal or Stripe). Although it may look tempting to accommodate more users by offering more payment options, there is one major problem to consider: reconciliation. If payments come from different payment providers, they need separate reconciliation. If there is just one payment solution, accounting will take significantly less time.
4. Consider Tax Obligations
Any company has to pay direct and indirect taxes, including corporate income tax, social security contributions from salaries, VAT, and others.
Simplified online payments processors make it very convenient to receive card payments globally but may complicate calculating taxes. For a customer, the price is final, and it does not always show the breakdown with the amount of taxes specified.
To overcome this issue and avoid any mistakes, it is advised to use cloud-based accounting software such as Xero. By setting up respective formulas and applying them in a matter of clicks, calculating tax should no longer be an issue.
5. Use Reliable Accounting Software
To have all books in order, it is indispensable to use a reliable system for invoicing, reconciliation, and accounting. Not only does it have templates for professional-looking invoices, but it also eliminates human error and automates reconciliation.
The best accounting software is:
- easy to use, even for non-accountants
- sufficient to cover everyday accounting tasks
- scalable and flexible to changes, such as a company’s rapid growth
Alternatively, there is PDF software with fillable PDF forms with a wide collection of templates covering the main accounting needs. These include profit and loss statement template, income statement template, and other forms.
6. Keep Receipts Organized
This approach requires consistency. However, it is the only way to avoid panic and lack of information at the end of the accounting period. Meticulously organized receipts keep a clear track of business expenses and answer any accounting questions. With the help of different smartphone apps, it should not be a problem to make PDF copies of printed receipts and keep them together rather than collect the paper ones.
At the same time, it is worth noting that certain receipts are not worth consideration. For instance, if you pay your accountant $60 per hour, posting a $1.5 receipt from a coffee shop may cost you more in accounting fees than the actual benefit from including this expense. In this case, buying a coffee from a personal card may be a better option, to simplify accounting and save money.
7. Use Fillable PDF Forms
Fillable PDF forms are a real time-saver for automating business routines. With the help of PDF software, one can automate bookkeeping tasks. Lumin PDF, well-known PDF editor software, offers the following fillable PDF forms for accounting:
- Income statement template sums up the earnings for a specific period, with the possibility to indicate the initial inventory, the number of sold items, turnover, etc.
- Purchase order template outlines expenses for goods or services in the accounting system. It includes details such as the vendor, the shipping address, quantity, and price.
- Balance sheet template keeps track of the total assets and liabilities for a specific period, specifying the inventory, division into short/long-term assets, etc.
- Profit and loss template sums up the cash flow, helping to keep an eye on liquidity.
Looks simple, doesn’t it? Just fill PDF forms, and accounting papers are all sorted out.
Final Takeaways
Bookkeeping can be tiresome, but there are many ways to simplify it. For instance, with the help of PDF software and fillable PDF forms, you can easily prepare a profit and loss template or an income statement template.
