Long ago, double-entry bookkeeping was a revolutionary development. However, many small businesses still struggle to understand this system. It’s more an evolution than a revolution.
Smaller companies – especially solopreneurs – are wisely inclined to outsource their bookkeeping. However, that doesn’t let the business owner off the hook.
Despite using outside experts to keep the books, your own involvement in the process means you can be surer of accurate results. You may dislike accounting, but having sound results is crucial. Executing some painless measures will actually keep those accounting complexities at bay.
The most important way to simplify your bookkeeper’s tasks and improve the validity of financial reports is to maintain a simplified twenty-first-century version of a paper trail: a digital paper trail.
All that’s required is a system for snapping pictures of receipts and saving them to separate digital folders established for every category of business expense. Look for software you can use with the camera in your smartphone or tablet. One easy system is to upload the pictures to cloud storage.
Take a few minutes a week to organize the receipts in the correct folders. Some purchases (such as a combination of supplies and new equipment) may fall into several categories. Make notes on the receipts to this effect before photographing them, so you don’t have to rely on your memory. Then save the same receipt in different folders, and your bookkeeper will use your notes to categorize each line item. It’s easy, reliable, and virtually pain-free.