“Entrepreneurs believe that profit is what matters most in a new enterprise. But profit is secondary. Cash flow matters most.” – Business consultant Peter Drucker
Having a strategy in place to organize your cash flow is one of the most critical components of success as an entrepreneur. It could make or break your business. The good news is you can stay on track and get a great handle on your income and expenses with the following tips.
The Importance of Bookkeeping for Small Businesses in Calgary
Bookkeeping is vital for the financial success of any business, not just for legal compliance or tax purposes. Accurate and up-to-date records provide valuable insights into a company’s financial health, enabling informed decisions and strategic planning. In Calgary’s competitive business environment, understanding revenue, expenses, and cash flow is essential for maintaining profitability and identifying growth opportunities.
Consistent bookkeeping helps prevent costly errors, ensures tax compliance, and positions businesses for long-term stability. By staying organized and efficient, businesses can enhance decision-making, manage cash flow, maintain financial transparency, and simplify tax preparation, ultimately driving success in a competitive market.
5 Tips for Small Businesses
1. Create A Seamless Invoice and Payment System
Gone are the days of physically sending your customers an invoice and waiting for a cheque to come in. Take advantage of online systems that allow you to send invoices digitally and easily monitor payments. These systems also make it convenient and simple for your customers to make a payment.
For example, QuickBooks Online lets you generate invoices and set up pay links within them for your customers to click and pay conveniently. The software also includes an option to set up an automatic reminder to let you know if customers are overdue on their invoices. This saves you a tremendous amount of time tracking down outstanding invoices and helps you stay organized with your receivables.
2. Take Bookkeeping and Payroll Software Training
While few companies today do manual bookkeeping, keeping up with modern bookkeeping and payroll software can be overwhelming. QuickBooks Online training helps you optimize the software’s functions and customize it to your business’s needs.
By getting comprehensive and detailed training, you can maintain your books and stay organized all year. This saves you time at year-end, increases accuracy, and minimizes human error. It also takes the guesswork out of having to learn it all on your own and eases the overwhelm of that initial learning curve.
3. Take Advantage of Cloud Accounting
One of the most valuable things you can do to organize your small business finances is digitizing your documents and storing them in the cloud. Having your records stored on a remote and secure online server allows you and your accountant to access them from anywhere, keeps them all in one place, and gives you peace of mind that they’re backed up and safe.
Furthermore, QuickBooks Online is a cloud-based system that automatically updates when tax laws and regulations change. With cloud accounting for small businesses, you can rest assured that your company complies with current laws and avoids any potential issues later on.
4. Separate Your Business Finances From Your Personal
If you’re a startup, it might seem easier to combine your business income and expenses with your personal finances. However, this can impact your ability to claim business expenses on your taxes and make it more time-consuming to track.
From the day you start your business, separate your bank accounts and create a whole new system.
5. Set Aside Time For Your Small Business Finances
Owning a business is much like a relationship – it takes time and effort. And like all relationships, you’ll need to spend time on what’s important. Throughout the year, it can be easy to get caught up in other areas of the business and be pushed and pulled in all different ways; however, your business finances are one thing that truly cannot be ignored or neglected. Invest in a good bookkeeping program and seek the help of a professional if you’re feeling overwhelmed.
