5 steps to help you clean up your process
Overwhelm and chaos. You know your business finances are a disaster, but you have no idea where to even begin fixing them.
These 5 steps will help you clean up your process:
Step 1:Taming the “Financial Shoebox” – Gather your documents.
You can not build an accurate picture of the past without all the pieces. Gather and upload the following documents to a secure and private portal.
Bank and Credit card statements: Every single page for all business-related checking, savings, and credit card accounts.
Loan or Lease statements: Any documents for business vehicle loans, equipment financing, or lines of credit.
Receipts & Bills: Take clear photos with your phone and upload them as well as move digital receipts/bills from your email or computer.
Prior Year’s Tax Return: Gather previous year’s business tax returns.
Step 2: Choosing Your Arsenal – Setting up the right tools.
Every business needs two foundational tools to stay organized for continued growth: a dedicated business bank account and professional accounting software.
Open a Business Bank Account: Your top priority is to open a dedicated business checking account. Locate an institution that fits your business needs and has low to zero banking fees.
Choose an Accounting Software: Select an accounting software that is the best fit for your business (for example, a popular software like QuickBooks Online).
Step 3:Untangling the Knot – Separating Business & Personal Expenses
It is important to separate business and personal expenses as these should not co-mingle. This is crucial for accurate reporting and tax compliance. This separation is required by the IRS, protects your personal assets, and ensures you are tracking the true profitability of your business.
Step 4:The Power of Reconciliation – Verifying Accuracy
What is bank reconciliation? Bank reconciliation is the process of matching the transactions in your accounting software to your bank and credit card statements, line by line, until they match to the penny. Reconciliation is the ultimate quality control. It confirms all transactions have been recorded, catches potential bank errors, and identifies any fraudulent activity. Your books are not "clean" until they are reconciled. This is the first step to clarity within your business.
Step 5:When to Call for Backup – Leveraging Professional Support
This step is about recognizing that your time and energy are your business's most valuable assets. The average business owner that is 1 to 3 months behind can spend 40-60 hours or more trying to clean up messy books. If an owner is more than 3 months behind, it can take several weeks to months to clean up. That’s time you could be spending with your family, meeting new customers/clients, or improving your products/services.
Feeling overwhelmed by Step 1? We can get you back on track.