Are you trying to save money for your t-shirt business?
Of course. We all are.
What’s one of the easiest ways to cut costs? Implement an effective bookkeeping solution.
Bookkeeping is the recording of all business transactions. The better job you do with this, the less money you have to pay an accountant later.
There are two primary areas of bookkeeping you must keep track of:
- Outgoing expenses
With both of these tracking areas, you must always keep your receipts and invoices.
Using a spreadsheet
You can track outgoing expenses and income with a simple spreadsheet such as one you would find in Excel. Most small businesses do this, however keep in mind there are some shortcomings.
Using an accounting software
First of all, writing out manual invoices can become tedious and time consuming. A more practical approach might be with an accounting software like Sage or QuickBooks. With these options you can complete the following functions:
- Stock control – for companies with lots of stock to manage
- Customer and supplier balances – if you have accounts with your suppliers or customers
- Invoice generation and management – generates invoices and stores them
- Keep track of your bank and credit card balances
- Bank reconciliation
- Profit and loss reports
Tracking your bank and credit card balances are far more helpful than people think. The software links directly into your accounts, making the tracking seamless. You won’t have to ever type in a transaction again, as everything is inserted automatically.
After that you can always go in and reconcile the balances, or check to see if the actual bank balances match up with your bookkeeping. This way you can check to see if anything was logged incorrectly.
Clearly, accounting software provides many benefits, however you must factor in the time it takes to learn the software, along with the cost. For those self-learners there are many tutorials on Sage and QuickBooks that can be found on YouTube.
Stay tuned for the second portion of this series to learn about what you should think about when considering cost for your accounting software, which software can complete VAT returns and why the location of your accounting software is important.