Successful bookkeeping strategies include any practice that allows your business to:
save time or money,
complete bookkeeping tasks more efficiently,
mitigate the stress associated with estimated tax payments, tax returns, and audits
plan for both your personal and business financial future
But the best – and sometimes the most overlooked – bookkeeping strategies are the ones that lend themselves to accomplishing all of these goals.
Basic Bookkeeping Strategies
While some bookkeeping strategies might seem obvious, they’re still important. Why?
Because they lay the foundation for the success of not only your business but also your personal finances. When used together, these time-saving tactics help form the basics of an efficient bookkeeping system.
Outsource Your Bookkeeping
One of the cardinal rules for small business owners including RV entrepreneurs is to delegate! Don’t try to wear every hat because inevitably at least one area will fall to the wayside (you’ll drop at least one hat).
In fact, contrary to popular opinion, the most successful business owners don’t do everything themselves. It’s best to know your strengths and your weaknesses and when it’s worth it to outsource vs. do it yourself. Taking advantage of outsourcing bookkeeping is not a sign of weakness. I see it as a plus to know what you’re good at and what you’re aren’t.
It’s also important because if you don’t like doing the books, then they most likely won’t get done. This is a good way to struggle with record-keeping and understanding the financial health of your business.
In fact, outsourcing is not only the best way to keep your financial records in order, but it can also boost your company’s profits by
- ensuring you utilize every available credit, deduction, and cost-cutting measure to minimize the taxes you pay, and
- allowing you to transform your financial reports into business strategies designed to maximize revenue (at the very least you’re going to catch areas where there’s too much spending or possibly not enough.
Utilize Online Accounting Tools
Manual bookkeeping is not only cumbersome and time-consuming but can also lead to more errors than using software or cloud-based solutions. The latest online technology makes it possible for your business to accomplish everything from syncing bank accounts with bookkeeping records to generating customer invoices while on-the-go from a mobile app to recording photos of expense receipts immediately after the expense occurs.
Other benefits of accounting software include
- the ability to generate monthly, quarterly, and annual financial statements,
- access to payroll software that makes running payroll a breeze, and
- convenient storage and retrieval of important supporting documents in the event that your business is audited
I have some accounting software suggestions on my software and tools page.
Regularly Enter Transactions (aka don’t procrastinate)
It’s important to regularly schedule a time to do the books. This includes recording both income and expense-related activities.
Hint: Don’t wait until tax time to frantically gather documents. This pretty much guarantees you’ll miss something or forget what an expense was for. I can barely remember what happened last week let alone 8 months ago!
Make time to review the books on a regular schedule. That can be anything from daily to weekly or monthly. If you keep up with things, it will take minimal time and most definitely will alleviate stress later. Not only will you be less likely to lose important documents and miss entering transactions, but it will also make the process of filing complete and accurate tax returns much easier.
Basic accounting strategies help set the stage for a profitable entrepreneurial journey. Trust me. I think you’ll be happy with the results from having organized books and easy to understand financial reports at your fingertips. Now that we’ve covered some basic bookkeeping tactics, let’s go over 5 overlooked bookkeeping strategies to help you on your RV entrepreneur journey.
1. Take an Active Interest in Your Business Finances
The more you know about what’s going on with your business, the more likely it is to thrive. Don’t simply outsource the books in the hopes that all is running smoothly. You still need to understand your finances in order to move forward and make crucial business decisions.
At the very least, I suggest spending time reviewing your company’s finances either weekly or monthly. Take a look at spending and the different avenues of income. It’s important to review if one avenue isn’t working or one income stream is stronger than expected. Then you can put more effort into that stream vs. another.
If you outsource bookkeeping/accounting, make sure to take the time to meet with your professional. Ask questions. Gather the reports. Understand the numbers.
2. Be Consistent
Planning starts with a consistent approach. This is everything from blocking a consistent amount of time to review finances to categorizing income and expenses consistently. Labeling transactions in a manner that’s understandable to you will not only help speed up any bookkeeping you do yourself but also vastly improve the accuracy of your books.
Accurate records = useful books and helpful company financial reports.
With consistency, it will also be easier for you to keep the books yourself if you choose to do so. It will also make tax time easier because you’ll have clean ready to go finances for the tax return. No more struggling to gather data, extra stress, and more time to focus on your actual business vs. spending hours scrambling on finances.
3. Stay Alert
Many entrepreneurs overlook how important it is to stay on top of cash, expenses, and bills.
Take advantage of automatic email alerts for your bills and credit card payments. That way you won’t miss a deadline, get charged interest or late fees. Alternatively, you can set up automatic payments with most credit cards and bills. That will save you time and avoid wasting time paying bills.
However, make sure if you set up automatic payments that you have enough cash to cover all your expenses. Hence, the whole recording income and expenses regularly to understand not just the financial health but that income is enough to cover expenses.
4. Fine-Tune Your Marketing
To get the most value from any marketing budget, it’s important to understand where those marketing dollars are earning the highest return. You might be surprised at the thing that’s working the best.
You can separately categorize each marketing avenue so you can see how they might be helping generate income and their return on investment. This can include social media, email marketing, print, in-person events, etc. You could even break down spending from Facebook Ads vs. Google Ads.
I think you get the idea – know where your marketing dollars are getting the best return on investment.
5. Look Ahead
Don’t let yourself become so bogged down by today’s business concerns that you forget to plot a path to the future. That can include new products, services, hiring, growth patterns, etc.
How will you achieve your goals? Do you even have business goals? It’s important to review them regularly and make sure what you’re doing is working to achieve those goals. Don’t be afraid of creating financial projections with different income and expense scenarios.
Plan for a change – maybe that’s a website redesign or launching a new product that will take some cash upfront. Whatever it is don’t forget to look ahead.
Hopefully, you’ve got a little clarity about bookkeeping strategies. If you’re still struggling check out my ebook, the 5 financial mistakes RV Entrepreneurs make and what you can do to fix them.
