Did you know that 54% of Americans are living paycheck to paycheck? Most of these problems come down to poor financial management.
Some consumers have a hard time saying no to impulse buys while others get in over their heads borrowing money. This might be because of a lack of self-control or ignorance of their finances. You might be wondering what is a typical salary increase when switching jobs.
In either case, learning more about keeping financial records could help you stay apprised of your current financial situation. This will lead to better decisions and valuable insight into how you can start cutting expenses.
We can help you develop some good bookkeeping habits. Keep reading for a quick guide on the best accounting practices.
Keep Your Business and Personal Finances Separate
First, if you’re an entrepreneur or own a business, it’s imperative to separate your personal and professional finances. This will make it much easier to file your taxes. This means opening a business account for your small company.
Then, you’ll need to add yourself to the payroll to ensure you get paid while documenting the expense for your business.
Catalog All of Your Receipts
One of the best tips for keeping financial records is to save all of your receipts. This is especially important for small business owners.
Take it one step further and catalog your receipts. You need to organize them into different groups based on what those expenses were for. This is important whether you’re looking at your personal or business filing records.
Update Your Records Weekly
Not all receipts are physical. Many of them are digital and are never printed out. As such, the best bookkeeping habits include recording all of your expenses and earnings on a digital platform.
Check out https://practicepro365.com/accounting/ to get a free demo of streamlined accounting software. These types of programs can make your life much easier.
Keeping financial records is something you should do weekly. At the end of each week, record every dollar that came in and every dollar that went out. Again, categorize them into different groups, such as:
- Utilities
- Services
- Debt payments
- Mortgage
- Business loan
- Payroll
- Groceries
- Etc.
The categories you use will depend on whether you’re keeping track of personal finances or business finances.
Consider Working With a Bookkeeping Agency
Finally, accept that you don’t have all the answers. Alternatively, you might not have the time or the patience to follow the best accounting practices. Most small business owners are busy enough as it is.
In this case, we highly recommend hiring a good bookkeeping service for keeping financial records, preparing for taxes, and keeping you apprised of your financial situation. They can also help you identify viable tax write-offs and credits that can save you money on your taxes.
Having Trouble Keeping Financial Records?
Do you have a lot of questions about keeping financial records? Do you think you can manage your personal or business accounts on your own?
We hope this article provided you with some good bookkeeping habits. And remember, if you know you won’t be able to do it on your own, there’s nothing wrong with reaching out for help.
For more financial tips or small business advice, stick around for a while and read through some of our other articles. Our blog was created to help people like you.
