The Sarbanes-Oxley Act of 2002 was passed to stop corporate malfeasance and accounting scandals at Enron, Tyco and other large companies that cost investors billions and many Americans their pensions. In 2014, a study by the University of Kansas School of Business found that only 728 financial restatements were filed with the Securities and Exchange Commission (SEC) in 2012. That’s down from 1,784 restatements filed in 2006. The study also found the highest proportion of egregious errors were filed by small and medium-sized companies as opposed to large corporations.
Accounting oversights and inaccuracies can land your company a hefty fine and also can cause leaks in revenues that will ultimately sink your startup. These three bookkeeping tips will help simplify the process and avoid costly mistakes.
Pick the Right Software
QuickBooks is by far the most popular business accounting software for small businesses, boasting a 90 percent market share, states PRWeb. Its interface is extremely user-friendly, complete with pictures to help you get started. The Setup Interview process helps configure payroll, accounts receivable and billing. There also are several pre-printed forms for tax filing, purchase orders and other business processes.
Gene Marks, owner of consulting firm Marks Group PC, argued that many Quickbooks users will be forced to switch to cloud-based solutions. For those who believe this proposition, PC Magazine recommends Xero because of its exporting capabilities and add-ons that you can customize to fit your business structure. Wave, FreshBooks and Kashoo also are highly regarded, cloud-based accounting solutions.
Invest in Cloud Storage
Most entrepreneurs aren’t trained accountants, which is why storing important documents in the cloud is essential. This way you’ll be able to access all of your financial statements on your smartphone, laptop or any other mobile device. It also gives your company an extra layer of protection if disaster strikes in the form of fire, hurricane or some other unfortunate event.
Dropbox is the most popular cloud solution because it’s user-friendly and provides 2 GB of free storage. And, you can earn up to 16 additional GB of storage by referring friends to the service. Another solution is OneDrive, which is built right into Windows 8.1. Carbonite and Open Drive also are popular among small businesses.
Use Apps for Expense Tracking
It can be a tedious process to keep track of receipts for gas, hotel stays, food and other business expenses that can be written off at the end of the year. Luckily, there are several expense tracking apps that make the process seamless.
- Expensify allows you to sync the app software with your credit cards to automatically capture expenditures and export them to PDF files. It also turns the camera on your phone into a scanner that can digitize paper receipts.
- Mileage Log+ is a great app for those who travel a lot by car. It stores frequent trips for quick recall and provides reimbursement rates pursuant to IRS regulations.
- BizXpense Tracker is another option to consider for comprehensive expense recording.
Effective bookkeeping is about organization and accuracy. DIY accounting is the most cost-effective solution, but don’t hesitate to consult a professional anytime a situation is beyond your understanding.
Joe is a former financial advisor and media representative for American Express and Ameriprise. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s also appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers and numerous other media outlets. Joe holds B.A Degrees from The Citadel and Michigan State University.
There are great Apps out there to keep record of your finances. It eases the work by accurately keeping records and saving a lot of time.
Do you have one that you like better than the others?