How much time do YOU waste on bookkeeping?
If you’re anything like most entrepreneurs, any time that’s spent on accounting or record-keeping tasks feels like too much. Bookkeeping is frequently cited as one of the worst parts about owning a business and according to one survey conducted by TD Ameritrade, almost half of the owners surveyed said that bookkeeping was their least favorite task.
Businesses, on average, spend approximately 120 working days per year on administrative tasks and bookkeeping –that’s 5% of their total manpower annually. That’s a lot –especially when you consider that a lot of those mundane, soul-sucking tasks can actually be automated.
Small businesses are especially prone to redirecting valuable resources to bookkeeping tasks, which can cut into profits and limit overall efficiency.
If you, like so many business owners, would like to slash the amount of time that you’re spending on bookkeeping –the good news is that there are plenty of tools and solutions available today that can help you to make short work of this often time-consuming process.
With this in mind let’s dive in and see how you can automate, simplify, outsource –and save time that you spend on those dreaded bookkeeping tasks.
Tools for Bookkeeping
Bookkeeping tools generally fall into two categories –accounting software and tools that are primarily for invoicing. Oh, and there are also handy tools that allow you to scan and save your receipts.
Let’s take a look at all three now.
First up, accounting software.
QuickBooks is one of the most established and popular accounting software programs available today, and can be a cost-effective way to streamline and simplify your business’ bookkeeping. QuickBooks also synchs with some 80 partner applications –including Shopify, which can equal a tremendous time savings. Integrate invoices from Gmail, PayPal, and other payment processers, import information from Excel, and more.
QuickBooks also allows you to manage payroll and direct deposits and customize your records based on your individualized business needs. Another great feature of QuickBooks is that their software allows you to track inventory and create over a dozen different templates. It also has an easy-to-navigate interface and a quick set-up process. You can also link up your business bank accounts, which can help automate a number of tasks.
- Automatically categorize transactions
- Offers payroll management features
- Integrates with some 80 applications!
- Processes payments
The only real downside to QuickBooks is the price. The most expensive package is currently $150 per month.
Cost: From $12 to $150 per month.
Wave is one of the best free bookkeeping and accounting tools that’s available today.
It has a simple interface and set-up process that allows you to focus on everything from invoicing to bookkeeping. When you first use Wave, you have the ability to customize your setup and choose the type of bookkeeping services that best meet your needs. You can connect your business bank account to Wave, as well as create customer invoices and databases. You also have the ability to upload your customer and vendor data via the CSV import feature.
What sets Wave apart from other accounting software options is that it is easy to use and is great for beginners. The Wave dashboard allows you to review individual customer transactions and organize the transaction. Unfortunately, Wave does not currently offer inventory tracking services, which can be a downside for some e-commerce stores.
Cost: Free, with fees for payment processing services.
For small businesses, an excellent freemium bookkeeping software option is SlickPie. While there are some limitations on the free version of SlickPie, like the number of invoices, bills, and bank transactions you can add, SlickPie is a great option for small companies. SlickPie allows you to import transactions from PayPal, credit cards, and bank accounts and track invoices, bills and expenses. SlickPie offers a quick set-up process and an easy-to-use interface as well.
Cost: Free starter option, with a $39.95 pro option available.
See more options for Bookkeeping software in your FREE bonus download sheet!
Invoicing. Yikes. What a time-consuming process, especially if you’re using a program like PayPal and trying to juggle it all, sending out funds whenever an invoice lands in your inbox.
Invoice software, though, allows for cross-platform integration, meaning that you can review all of your invoices at once without having to log in to multiple accounts or websites.
Here’s a look at some popular options:
- Invoice Ninja
Invoice Ninja offers both free and paid invoice software plans. For small businesses, the free version of Invoice Ninja will work, while paid is ideal for larger companies. Invoice Ninja integrates with more than 45 payment processers and also supports auto-billing and recurring billing features.
Cost: Invoice Ninja has a freemium version. Paid plans start at $8 per month, with the Enterprise Plan starts at $12 per month.
- Zoho Books
Zoho, like Invoice Ninja, offers both free and paid plans. However, Zoho is one of the best options for large or growing businesses. Most invoice software allows you to organize invoices and access your invoices via a computer or smartphone. These features make it easier to track your company’s finances even if you are away from the office. Invoice software also cuts down on the need to store paper records and makes it easier to track your finances, especially if you’re an e-commerce store.
Cost: Zoho starts at $9 per month and goes on up to $29 per month for the professional package.
Apps for Scanning Receipts
There are a number of tools out there that allow you to scan and save receipts, saving you from a mountain of documents sitting on your desk.
Here’s a look at a few:
Shoeboxed makes it easy to clear away piles of paper receipts. You can scan them yourself or mail them directly to their processing facility for free with their postage-paid Magic Envelope™. It doesn’t get much easier than that! Shoeboxed starts at $29 per month.
- Receipts by Wave
Receipts by Wave is another good option. This free receipt management app allows you to take pictures of your receipts, and save the receipt information. It’s easy to categorize your receipts with this tool, plus it’s free and available for iOS and Android devices; there’s also a web version.
Expensify is an expense report and mobile app provide that allows you to scan receipts via your phone, as well as import expenses and receipts directly from credit cards. Expensify also works with Freshbooks, which emans that it’s simply to create expense reports as well.
Expensify is free to individuals, or $5 per month per employers, and the app works with both iPhone and Android.
Tips for Simplifying Bookkeeping Tasks
In addition to tools that can help to make life easier, there are a number of things that you can do to increase your efficiency and simplify your tasks as well.
Here’s a look at some ideas:
Keep Business and Personal Accounts Separate
One of the biggest mistakes business owners make when it comes to accounting and bookkeeping is failing to maintain separate business and personal bank accounts. While it is understandable that occasionally using personal debit or credit cards for incidental expenses is convenient, it can make it difficult to properly account for business-related expenses.
Tax laws allow business to deduct certain expenses, so utilizing personal accounts can make it more difficult when it is time to complete your annual taxes and maximize your deductions. Additionally, relying on personal accounts to pay business related expenses can increase your risk of experiencing compromised security. Business accounts typically offer higher levels of protection and insurance, while personal accounts can be more susceptible to fraud or identity theft. For example, if your personal debit card is compromised and you used the same card to pay for business-related expenses, your business’ financial health and security can suffer.
Ensuring that you have separate business debit and credit cards also makes it easier to track expenses.
Digitize Records and Documents
Whether you prefer paper copies or digital records, ensuring that you have a well-organized and effective storage system for financial records is important. Many services allow you to digitize receipts and records. Digitizing records not only makes them more accessible, but also cuts down on the amount of space your business needs to store paper copies. If you choose to maintain digital records, cloud storage services, such as Dropbox and Google Drive, can provide secure and easily accessible alternatives to filing cabinets. Digitizing records also ensures that you retain access to important documents even if the originals are lost.
Hiring an in-house bookkeeper isn’t always to most cost-effective solution, especially if you own or operate a small or midsized business. One idea is to enlist the help of a virtual assistant. This can lower your bookkeeping costs because you can choose to pay hourly rates or engage in short-term contracts.
Software can save you time, but outsourcing offers an even bigger time savings. In many cases, outsourcing to a virtual assistant can even prove to be more cost effective than purchasing and using high-end accounting software, and is an ideal solution if you’re busy, don’t enjoy accounting tasks, and would quite frankly rather spend your time doing things besides filing documents and monitoring spreadsheets.
Schedule Time Each Month to Review Company Finances
Whether you’re outsourcing your bookkeeping or doing it yourself, it’s still important to take time each month to review your company finances.
While most business owners loathe bookkeeping, scheduling time each month to review financial information is crucial for making informed business decisions.
Schedule an hour or two per month to sit down and review financial information. Performing regular transaction monitoring, or utilizing an automated tracking system, can also make sure that you notice improper deposits or withdrawals immediately. Sometimes, banking errors can cause financial losses, while other times unauthorized transactions can lead to account security problems.
Keep Good Records As You Go
Ever get to the end of the year and can’t remember what any of your expenses are for? Save yourself from the mental gymnastics of trying to remember by jotting down notes on each receipt, outlining what, exactly, each purchase was for. Some digital receipt scanning apps, like Receipts by Wave, have options to add notes or tags to your digital receipts as well.
Back Up Your Records
Maintaining records ensures that you always have access to the most important financial statements related to your business. Regardless of how you choose to keep your financial records, it is imperative to back them up. If you digitize records, consider using cloud storage and keeping an extra copy of your data on an external hard drive. For paper records, you can store a second copy of important documents off-site, such as in a storage locker. The reason it is important to have at least two copies of important documents is because records can become lost, stolen or damaged.
Financial audits can occur years after filing taxes, meaning that you need to make sure that copies are accessible in the future.
The world is constantly changing. Financial and tax laws regularly change, as does technology. Continuing to stay up-to-day on financial and tax regulations is an important part of effectively managing your business. When it comes to bookkeeping, you’re required to keep records for a certain number of years in case of an audit. In some cases, this time period can extend up to six years. Changes and updates to local, state, and federal laws can either increase or decrease your need to maintain certain records. Banking laws and payment options are also continuously changing. The mainstream use of digital payment solutions, ranging from services like Stripe and PayPal to cryptocurrency, can impact your bookkeeping requirements.
Use Common Sense
When you are managing your company’s bookkeeping tasks, use common sense. If something doesn’t add up or looks inaccurate, follow up with the parties involved. If you are confused about an expense or invoice, don’t be afraid to ask. Being diligent will help to keep everyone accountable and promote honesty.
While it is important to limit expenses, if bookkeeping tasks are overwhelming or even time-consuming, then you’ll want to consider contracting a virtual assistant or accounting company to lighten the burden –saving you time, and allowing you get back to doing what you do best!
Are you looking to streamline your efficiency? Reach out to Sidekicks today for your FREE 30-minute consultation, and see how a VA can make short work of many time-consuming accounting tasks.