7 Tips for Small Business Bookkeeping

You probably know how difficult it can be to keep your bookkeeping in order, but with these 7 easy tips, you will be off to a good start in keeping things organised and easier to account for.

1. Keep your business bank account separate from your personal accounts.
Business expenses should be documented and kept separate from your personal expenses. Since business expenses can be used as deductions, it makes it much easier at the end of the year if you keep a separate bank account and credit card for the business and makes it easier to reconcile. You might incur a few service fees when you first start your business, but separate accounts are well worth it in the long run.

2. Don’t put business and personal purchases on the same receipt.
Store cashiers are accustomed to ringing up separate receipts when you are buying personal items at the same time you are making business purchases. They understand the reason for this and so should you! It is much easier to claim business tax deductions and it is easier to keep track out your expenses. You could get yourself in trouble if you overlook personal expenses and claim them as a deduction for business purposes accidentally.

3. Keep your receipts.
Many places are trying to go “green” and won’t give you a receipt unless you ask. Be sure to keep them separate for business and personal uses.

4. Safely store business receipts.
To stay organised, keep all of your business receipts in the same place, otherwise, you will find yourself tearing your vehicle apart or going through pants pockets trying to find them when it is time to do your BAS and/oryear-end taxes.

5. Use a log book to track business travel.
Read the odometer before and after your business trips and keep an accurate log of it to avoid mixing it with personal usage.

6. Business records should be retained.
Keep all of your business records in a file cabinet or a large flexible folder and label each folder to make it easier to retrieve them.

7. Five (5) years worth of records.
Generally, you need to keep records for at least five years, from the date the notice of assessment is sent to you.