Regularity & Plan for your bookkeeping tasks
How often should I do my bookkeeping?
Most people should do their bookkeeping, at the least, once a week. However, if you are working on your accounting every day, it is more likely to become a habit.
If you want to hire a bookkeeper weekly, you can pay for the number of hours needed to finish your work. Then the payment will be an hourly rate that depends on the complexity of your business transactions. Nevertheless, doing the work weekly will keep your work up to date that is essential for the survival of the business and the growth as well.
I do my bookkeeping daily. My accounting takes me between three to five minutes every single day. I have a morning routine where I process my inbox, Facebook notifications, and then I do my bookkeeping. It is a small, simple task, and having it broken down works well for lots of business owners.
Do not allow the work unattended because it becomes too much to handle.
To avoid making mistakes start doing it before it accumulates too much. If not, the work becomes complicated and tends to make too many mistakes. Consequently, it affects the reality of the production of financial statements. Practice and You have to make mistakes to help you learn over time. You cannot expect yourself to do your bookkeeping once every six months and wonder why it is so hard.
How long is it going to take me to do my bookkeeping?
The general rule of thumb is that the more time that elapses between doing your bookkeeping, the longer it is going to take. It sounds counterintuitive, but doing it more often helps you stay on top of it.
How do you know how often you should do your bookkeeping?
Here are some things to think about:
First, what are your patterns with procrastination? It is pointless to ask yourself practical stuff if you are not acknowledging your emotional resistance to money. You can come up with an efficient bookkeeping schedule. However, if you do not work with the psychological reasons, you resist and avoid your cash. You will never stick to your perfect plan.
As an entrepreneur of a small business, you take the responsibility of preparing your accounts. In addition, if a growth anticipated shortly, you need to get a freelancer to do your bookkeeping work. If you are expecting a significant amount of improvement in sales, it is advisable to look for a freelance accountant for your business to handle all your accounting functions.
What is the job of a bookkeeper?
A bookkeeper will record all the business transactions, and then pass it on to your accountant. Where he/she will do the analysis, prepare reports, management accounts, reviews, recommendations, and interpretation of the statements for the non-finance owner of the business.
If you decide to do the accounts without an accounting program, then think about whether to use the single entry system or the double-entry system. Single entry system used where there are not many transactions, and to maintain a register to record your transactions. Remember, whether you have fewer deals or more, you have to be self-employed. Therefore, the records have to keep in the proper order to do the year-end calculations for tax purposes.
Then using a double-entry system for your business transactions is also not complicated. It is only a matter of two entries for one sale, one is debit, and the other entrance is credit, which is the basis of the double-entry system.
Be honest with yourself because that will help you figure out what triggers you to procrastinate. You need to get real with yourself about your habits around procrastination, money, and reasons for not doing things that relate to money. Are you worried about getting to know about the truth about your situation with your capital?
Then you want to ask yourself how many transactions do I have?
These are credits and debits into and from your accounts. The more transactions you have, the more frequently you need to do your bookkeeping. If you have five transactions per month, you can probably do your bookkeeping once a month. It’s not that much to keep up with as that few transactions.
https://www.sataccounts.co.uk/2019/03/26/bookkeeping-today-for-small-business-owners-%ef%bb%bf/
If you have 500 transactions a month, waiting until the end of the month to process all of that will be AWFUL. You will want to break your bookkeeping down into more manageable chunks, so it’s less overwhelming.
What’s my tolerance level for bookkeeping?
How long can you sit and do your bookkeeping without checking out or getting overwhelmed? If it’s only 10 minutes, then daily accounting is for you. If 2 hours is a breeze, you can do your bookkeeping every 2-4 weeks.
How time-sensitive are your tasks?
Sometimes, we have things that need doing right away, and we might not be doing them. A great example of this is invoicing. Let us say that you have only ten transactions a month, but five of those are invoicing clients. Do you want to wait an entire month between invoicing? Probably not.