Accounting Is The Heart Of Business
Often, we believe bookkeeping is stressful because daily actives can often create multiple transactions causing us to feel overwhelmed. Creating a routine of 5-10 minutes a day of checking in for messages from your accountant or entering in transactions is all it takes. Plus, make one day at the end of or the beginning of the week to update and overlook financials. One day at a time.
Often, we buy on impulse or out of fear. We need one day a week for planning expenses. You will find that you will begin to check your expenses daily. Yes, daily. You can set aside some funds or unexpected expenses. A budget will help you fall into a pattern of overcoming your emotions for better money management. Is daily monitoring of expenses necessary? Yes, you need to know what comes out of the bank account, what’s pending, and if there are any bank errors or fraudulent activities. Don’t just believe money management is just having good thoughts.
If you delegate, the banking management task to someone else makes sure you have notifications from your banking institute to see your balances. CFOs (chief financial officers) check the business bank accounts before we start the day. We need to know what’s going on. Bookkeeping is not a set it and forget it task. Once you pull in the transactions, we must categorize that information. A budget will help you identify spending on the front end so you will not feel so lost when the time comes to place your expenses into the correct accounts. I like to brainstorm spending.
Bookkeeping organizes our income and expenses, but many of us aren’t ready to admit the hard truth that our spending may be out of control. Many people feel like they don’t have freedom in their finances when they track expenses. But if your money is gone as soon as you receive it and you have no idea where it went, how is that freedom? Bookkeeping and budgeting go hand in hand. Why? Budgeting is a flexible plan for the week, month, year. Bookkeeping tells the actual picture of what occurred.
Example: If you earned $100.00 and you spent $20 for merchant fees, supplies, and other costs. The real profit is $80, not $100.00. Taxes are calculated from the net profit. Example: $80.00 x your tax rate equal taxes due. Proper tax planning will lower the amount of taxes.
Each step is the natural step of running a business or tracking income. Your accountant can simplify accounting. Don’t let it get you down!
Written by: Y. Michelle Coard, B.A.S, A.A.S, Accountant, President of B&P Accounting Solutions, Corp., and Profit Strategist