📘 20 Bookkeeping Tips Every Small Business Owner Should Know

Before We Dive Into the Next Series, Here's a Roundup You Can't Afford to Miss

Running a business is exciting - but messy books? Not so much. As a small business owner, you wear many hats, and bookkeeping might be one of the trickiest. Whether you're just starting out or have been in business for years, these 20 tips will help you avoid common pitfalls and keep your finances on track.

Before we dive into our second series of insights, here’s a full recap of our first 20 bookkeeping tips - each packed with real value and actionable advice. Of course, if you're ready to hand this off to a professional (and finally breathe easy), I’m here to help.

✅ Bookkeeping Tip #1: Separate Business and Personal Finances

Mixing personal and business expenses can create a nightmare during tax season. Set up a dedicated business bank account and credit card. This makes it easier to track deductible expenses and maintain clean records that your accountant (and the IRS) will appreciate.

✅ Bookkeeping Tip #2: Always Keep Receipts

Save every receipt, whether it's for a $2 parking meter or a $2,000 software subscription. Use a mobile app or cloud storage to organize them digitally. These records can support tax deductions and protect you in the event of an audit.

✅ Bookkeeping Tip #3: Track Your Income Accurately

Don't rely on your memory. Record every sale, whether paid by check, credit card, or ACH transfer. This ensures your income matches your bank deposits and helps you measure true profitability.

✅ Bookkeeping Tip #4: Reconcile Bank Accounts Monthly

Reconciling means comparing your books to your bank statement. It catches missed transactions, fees, or double entries. Doing this monthly ensures your records stay accurate and current.

✅ Bookkeeping Tip #5: Automate Where Possible

Use tools like QuickBooks Online, Dext, or Hubdoc to automate expense entry, bank feeds, and invoicing. Automation reduces human error and gives you more time to focus on growing your business.

✅ Bookkeeping Tip #6: Create a Consistent Schedule

Bookkeeping once a week keeps you in control. Schedule a recurring time on your calendar to review and enter transactions. Consistency prevents backlog and improves accuracy.

✅ Bookkeeping Tip #7: Understand Your Chart of Accounts

The Chart of Accounts is the backbone of your bookkeeping system. Make sure you categorize correctly—know the difference between an asset and an expense, or an income vs. liability. This impacts your financial reports and tax filings.

✅ Bookkeeping Tip #8: Keep Business Mileage Logs

If you use your vehicle for business, track the miles with an app like MileIQ. You’ll need a mileage log to claim deductions, and they must include the date, purpose, and distance traveled.

✅ Bookkeeping Tip #9: Back Up Your Financial Data

Don’t risk losing your records. Store backups in the cloud (Google Drive, Dropbox) and on a secure physical drive. It protects you from system crashes, theft, or data corruption.

✅ Bookkeeping Tip #10: Categorize Transactions Correctly

Accurate categorization is crucial for understanding your financial health. Mislabeling transactions can skew your reports and affect tax deductions. Review categories monthly and adjust as needed.

✅ Bookkeeping Tip #11: Avoid Cash Transactions When Possible

Cash is hard to track and easy to forget. Whenever possible, use cards or checks that create a digital trail. If you must use cash, record it immediately and attach a receipt to keep your records complete.

✅ Bookkeeping Tip #12: Review Financial Reports Regularly

Don’t wait until year-end to review your Profit & Loss or Balance Sheet. Monthly reviews give you insights into your business's performance and help catch problems early.

✅ Bookkeeping Tip #13: Track Accounts Receivable

Sent invoices don’t equal paid invoices. Keep a close eye on unpaid invoices, follow up regularly, and implement clear payment terms to improve your cash flow.

✅ Bookkeeping Tip #14: Record Expenses Promptly

Waiting too long to record expenses leads to missing receipts and forgotten details. Make it a habit to enter expenses immediately or at the end of each workday.

✅ Bookkeeping Tip #15: Understand Sales Tax Rules

Sales tax can be tricky and varies by state, product, and service. Make sure you're registered properly, collecting the right rates, and remitting payments on time to avoid penalties.

✅ Bookkeeping Tip #16: Use a Professional for Clean-Up or Setup

Starting your books right—or cleaning them up—sets the foundation for everything else. A professional can structure your system correctly, saving time and reducing errors long-term.

✅ Bookkeeping Tip #17: Don’t Rely Solely on Your Bank Balance

Your bank account may have cash, but that doesn’t reflect your true financial position. You could still owe vendors or have outstanding checks. Rely on full reports, not just your balance.

✅ Bookkeeping Tip #18: Label Personal Use Clearly

If you accidentally use your business card for something personal, make sure it's labeled as such. This keeps your financial statements accurate and prevents confusion during tax prep.

✅ Bookkeeping Tip #19: Don’t DIY Payroll Unless You Know What You’re Doing

Payroll includes taxes, reporting deadlines, and labor laws. Mistakes can lead to fines. Consider using payroll software or outsourcing to avoid compliance issues.

✅ Bookkeeping Tip #20: Hire a Pro Before It Gets Messy

Waiting too long can turn a simple clean-up into a major project. A bookkeeping professional can keep your records organized, up-to-date, and ready for taxes or growth planning anytime.

Feeling overwhelmed? Let a professional take it from here. If you're ready to spend more time growing your business and less time stressing over spreadsheets, I’m just a message away.