What I Wish Every Small Business Owner Knew About Bookkeeping

After more than 12 years working in bookkeeping, there are a few things I wish every small business owner knew about their books.

Not complicated accounting rules.

Not confusing financial jargon.

Just a few simple things that can make running a business a whole lot easier.

1. Your bookkeeping isn't just about tax

I think this is one of the biggest misconceptions about bookkeeping.

Your books aren't just there so you can hand everything over at tax time.

Your bookkeeping should help you understand what's actually happening in your business throughout the year.

Are you making money?

Are your expenses creeping up?

Who still owes you money?

Are you charging enough?

Can you afford that new vehicle or piece of equipment?

Your numbers can help you answer these questions.

2. Your bank balance doesn't tell you everything

Seeing money in your business bank account can feel reassuring.

But your bank balance isn't the same thing as profit.

You may have money sitting in the bank that needs to cover upcoming bills, GST, wages, tax or other commitments.

On the other hand, you might have made a profit but still have less cash available because customers haven't paid their invoices yet.

Don't judge how your business is doing by your bank balance alone.

There's more to the story.

3. Keep your books up to date

I know.

Bookkeeping isn't exactly the most exciting job in the world.

It's very easy to think:

“I'll catch up on it later.”

But when weeks or months go by, catching up becomes a much bigger job.

Keeping your books up to date means you have a much clearer picture of what's happening and you're less likely to get hit with a huge pile of paperwork when BAS time comes around.

4. Don't ignore unpaid invoices

You've done the work.

You've sent the invoice.

Now you need to get paid.

It's surprisingly easy for unpaid invoices to slip through the cracks when you're busy running a business.

Keep an eye on who owes you money and follow up overdue invoices.

Getting paid for the work you've already completed is a pretty important part of keeping your business moving.

5. Keep business and personal spending separate

This one can save you a lot of headaches.

If possible, keep a separate bank account and card for your business.

When personal and business expenses are all mixed together, it makes your bookkeeping harder and makes it much more difficult to see what's actually happening in your business.

Keeping things separate from the beginning can save you a lot of time later.

6. You don't have to understand everything

You don't need to become an accountant to run a successful business.

You should understand the basics of your numbers, but you don't need to know every accounting rule or understand every report in your accounting software.

That's why having the right support can be so valuable.

Your bookkeeper should be able to explain things in plain English and answer your questions without making you feel silly for asking them.

If you don't understand something, ask.

There really is no such thing as a silly bookkeeping question.

7. Asking for help isn't failing

This is probably the biggest thing I wish business owners knew.

Doing everything yourself doesn't make you a better business owner.

Sometimes the smartest thing you can do is recognise that your time is better spent elsewhere.

You might be great at building houses, fixing cars, landscaping, running a salon, selling products or looking after your customers.

That doesn't mean you need to spend your evenings trying to reconcile your bank account.

Your business is your expertise. Bookkeeping is mine.

8. Your numbers can actually help you grow

Good bookkeeping isn't just about looking backwards.

Your numbers can help you make decisions about the future.

They can help you see what's working, where you're spending too much, whether your prices need reviewing and whether your business has room to take on another employee, vehicle or project.

You can't make informed decisions about your business if you don't know what's happening financially.

The bottom line

You don't need to love bookkeeping.

You don't even need to understand all of it.

But you do need to know what's happening in your business financially.

And if your books are starting to become another thing you're constantly putting off, you're not alone.

That's where I come in.

At Alpha Bookkeeping, my goal is to take the stress out of your bookkeeping, explain your numbers in plain English and give you the information you need to feel more confident running your business.

If you're spending your evenings catching up on bookkeeping, falling behind with your accounts or simply want to know what's really happening with your numbers, let's have a chat.

Ready to take bookkeeping off your to-do list?

Book a free, no-obligation chat with Jen at Alpha Bookkeeping.

Let's talk about your business, where you're at now and how I can help keep your books up to date.

👉 Get in touch today

— Jen, Alpha Bookkeeping