Author: Cassie Scott
One-third of small businesses fail because they ignored their finances, according to The Balance. To thrive and survive in 2019, focus on your assets and bookkeeping.
Bookkeeping involves tracking your company’s finances, which includes recording all transactions where you spend or receive money. Bookkeeping also helps companies track inventory, assess spending and make smart financial decisions. Businesses must keep accurate records to ensure they file local, state and federal taxes correctly.
Use these bookkeeping tips to ensure your business profits this year.
Designate one person on your staff or bring in an accounting firm to handle your books. Photo Credit: ATA
Designate a Bookkeeper
Proper bookkeeping is essential to managing a business, and that means every company must have a qualified bookkeeper.
Knowledgeable bookkeepers can track transactions in a workbook or an Excel spreadsheet. Miscalculations can crumble any business. If you don’t have the experience and know-how to keep your business safe, consider hiring a professional bookkeeper or accountant. These pros can help you avoid mathematical errors and financial chaos. Their services can also include financial suggestions and business advice. A qualified, reliable bookkeeper ensures peace of mind that lets you focus on sales and repairs.
If you’re capable of handling your own bookkeeping, study your accounting software options. Many digital programs are affordable and automated, giving you the power to confidently make financial decisions. But don’t despair if you need help. The Archery Trade Association provides many ATA-member service providers to ensure access to expert bookkeeping. Log in to your ATA-member account and click “member service providers” in the left sidebar to view your options.
Keep Good Records
Once you select a bookkeeper or program, you must ensure all records get recorded. Whether your business is big or small, you must record every transaction.
Track how much money comes in and goes out, and from where. Also track subsidiary records to prove your revenues and expenditures. That includes invoices, work tickets, banks statements, payroll records, and cash-register tapes and summaries. Update the books regularly to ensure you don’t forget line items. You must organize your files to ensure easy access and review in the future. For starters, consider organizing your revenue categories into service, sales and range time.
If you outsource your accounting work, meet regularly with your bookkeeper or a program representative to ensure they’re on track.
Make sure your records are up to date and accurate. Discuss any discrepancies with your staff. Photo Credit: ATA
Evaluate Your Records
John Nelson, ATA’s senior director of finance and operations, recommends businesses evaluate their records quarterly to ensure they can make informed decisions.
“By evaluating the bookkeeping history, an archery business can identify obsolete inventory items, determine which items produce the largest margins, and see seasonal and historical trends in classes of revenues and expenditures,” Nelson said. “These discoveries help archery businesses monitor and project cash flows, which helps them succeed.”
The more detailed your records, the easier you’ll identify unproductive products or business categories, and make appropriate changes.
Plan and Adapt
Any business owner can evaluate the company’s records, but if they don’t adapt to what the numbers show, what’s the point? Companies that survive and flourish identify barren products, services or business projects, and make improvements that spur growth. When hot products go cold, cancel future orders and buy more strategically. Make plans and establish monthly budgets, but don’t fear making changes to boost your business.