At Plack Group, we know that keeping your business finances organized can be a challenge, especially when your focus is on running and growing your business. However, strong bookkeeping habits are the foundation of financial clarity and long-term success. Whether you’re a seasoned business owner with a dedicated bookkeeper or just starting out, these five essential practices will help keep your books accurate, up-to-date, and ready for whatever comes next.
1. Separate Personal and Business Finances
The most important step in effective bookkeeping is maintaining a clear boundary between your personal and business finances. Open dedicated checking accounts and credit cards for your business. This simple habit ensures that deductible expenses aren’t missed, reduces time spent sorting transactions, and keeps your records accurate and audit-ready. Keeping finances separate also makes it much easier to track your business’s true financial health.
2. Accurately Tag Income and Expenses
Properly categorizing (or “tagging”) every transaction is essential, especially when tax season arrives. Accurate tags help you maximize deductions, understand your spending patterns, and generate meaningful financial reports. If you’re ever unsure about how to categorize something, start with trusted resources like IRS.gov’s business expense guide, or reach out to your accountant for personalized advice.
3. Reconcile Accounts and Keep Records Organized
Reconciling your bank and credit card statements every month is crucial for catching discrepancies early and ensuring your records match reality. This proactive approach prevents major adjustments at year-end and helps you spot potential issues-like missing deposits or unauthorized charges-before they become bigger problems.
At the same time, keep your records organized; group like items together, digitize receipts and documents, and keep each entity’s records separate. Organized records make retrieval easy and ensure nothing gets lost in the shuffle.
4. Schedule Regular Bookkeeping and Payroll Reviews
Consistency is key. Set aside a specific time each day or week to update your books, whether it’s 15 minutes every morning or an hour every Friday. Make payroll review part of this routine, even if you use a payroll service. Regularly check that wages and tax withholdings are accurate to avoid unpleasant surprises at year-end. Staying on top of both bookkeeping and payroll prevents errors and ensures you’re always working with up-to-date information.
5. Review Financial Reports Regularly
Make it a habit to review your financial reports; such as profit and loss statements, balance sheets, and cash flow statements-on a monthly or quarterly basis. Regular reviews help you understand your business’s position, spot trends, and identify any financial “leaks” before they become bigger issues.
Conclusion
Good bookkeeping isn’t just about compliance, it’s about empowering yourself with the information you need to make smart business decisions. By separating your finances, maintaining a regular schedule for bookkeeping and payroll, reconciling accounts, tagging transactions accurately, staying organized, and reviewing your financial reports, you’ll build a solid financial foundation for your business.
Don’t forget to take advantage of the many learning resources available to you. Most bookkeeping platforms, such as QuickBooks Online, offer extensive tutorials, help centers, and video guides. YouTube is also full of step-by-step tutorials that can help you become more efficient and accurate in your bookkeeping practices. The more you know, the more confident and capable you’ll feel in managing your business finances.
Remember, you don’t have to do it all alone. If you ever feel unsure or overwhelmed, our team at Plack Group is here to help. We’re committed to supporting you with expert advice, practical tools, and the personalized attention you and your business deserve.
Let’s work together to keep your books clean, your stress low, and your business thriving.
Founded on a simple yet powerful principle – helping people – Plack Group is more than just an account firm. We create effective solutions that embody your core values and beliefs. From our home in Bel Air, Maryland, we’re proud to serve kind and dedicated clients across the United States.
We’ll say what others might not: we love our clients. Our commitment extends far beyond tax returns and financial analysis. We specialize in finding solutions for high-income individuals and business owners with complicated tax situations.
Our approach is to work with you to uncover hidden deductions, craft strategic solutions, and drive your financial growth. We dissect complex tax issues providing detailed insights tailored to your needs while giving recommendations like we are advising our own family.
