Bookkeeping is a great occupation for those that really like that kind of work, and for those who need a bookkeeping/tax/accounting service, you can be of great benefit if you can do a few up front chores to help.
A filing system that doesn't take a lot of time, is a great benefit. Simply put all receipts, documents, bank statements, government correspondence, and paperwork pertaining to your business, as you get it, in over sized, monthly envelopes, labelled the month and year that they pertain to.
The documents need not be sorted, because they have already been filed, monthly, and that is sufficient. Your bookkeeping office would appreciate receiving your files monthly, quarterly, or annually, depending on the size of each envelope. As a "rule of thumb", the more documents that are received, the more often you should pass them on to your bookkeeping office.
Our suggestion, is for all of your collected sales, make a regular bank deposit, and don't use any cash received to pay for supplies, or anything else. In this way, the banker will show you on your monthly statement, the amount you have collected.
When you need funds for your personal use, simply initiate a bank transfer to your personal account. Transfers are not considered expenses.
When you need funds for your business use, simply initiate a bank transfer from your personal account. When your business account needs additional funds so expenses can be paid for, before you collect from your business customers, you could consider drawing on a line of credit at the lowest interest rate you can get, and deposit those funds to your personal account, and transfer to your business account. When the funds are available in your business account, transfer back to your personal account and use that, to pay down your line of credit.
Our suggestion is to write cheques to pay for major business expenses, and use either a business credit card, or a personal credit card, exclusively used for business expenses, for purchases of necessary smaller supplies. Your business use credit card must always be paid in full when the due date arrives, otherwise the interest charges will more than cancel your efforts at keeping your costs to a minimum. Do not use a credit card, ever, if it cannot be paid off in full by the due date.
Your business will pay 100% of the credit card balance, without incurring interest charges, when paid in full, and the number of transactions on your bank account statement will result in a reduced service charge rate. The credit card company does not charge on the number of transaction, and only on the unpaid balance at a huge interest charge.
For business people who do not issue invoices for services, like the roadside firewood and vegetable stand, or barbershop, keep a log book to show the date, and amount collected. When you don't keep this record accurate, then everything else you do is probably just as careless, and no system will give you any idea of how well you really are doing.
Accounting is not a perfect science, but as a tool, to measure the temperature of your business, any errors in it's gauge will not let you know if your business is healthy or sick. Don't trick yourself into the belief that not reporting something to yourself will be a benefit. It's much better for you to know exactly what is happening in your business, so sound decisions can be made, as opposed to thinking that by hiding something from someone, will result in great things happening for your business. It won't.
For those business people, who having access to a computer, and have access to Excel, as a software spreadsheet tool, may I suggest you study up, on the use of a pivot table.
Here is the link to learn about the “pivot table”.
September 12, 2020