Bookkeeping Done Right

1. Bookkeeping Basics

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Q: Is it necessary to separate my business and personal finances?
A: Yes. Opening a dedicated business bank account prevents confusion, makes tax filing easier, and protects your assets. The IRS frowns upon taxpayers who comingle funds.

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Q: Which accounting method should I use: cash or accrual?
A: Cash-basis records income/expenses when money changes hands, ideal for small or simple service businesses. Accrual-basis records income/expenses when incurred, giving a clearer long-term financial picture. Many businesses start with cash and switch as they grow. Our bookkeepers help determine the best fit for your business.

 

2. Record Keeping & Organization

Q: How should I store my financial records?
A: Use secure digital storage, such as cloud services or encrypted drives, and keep hard copies in a safe place. IRS-relevant documents (e.g., receipts, payroll, tax filings) should be kept for at least three years. Aventa Tax offers secure, digital storage solutions.

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Q: What documents do I need to keep for bookkeeping?
A: Keep invoices, receipts, bank statements, payroll records, contracts, bills, and tax filings. Keeping thorough records supports audit readiness and clearer business insights.

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Q: How often should I reconcile my accounts?
A: Reconcile bank and credit card accounts at least monthly. Frequent reconciliations catch errors early and keep your financial records accurate. Our team provides monthly bank reconciliation services to ensure your financials are clean!

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3. Managing Transactions

Q: What’s the best way to track all business expenses and income?
A: Use accounting software to streamline transaction recording and categorization. Always document transactions and use a consistent chart of accounts. Setting up the right chart of accounts if critical to your business, since it is dependent on the type of entity you have. Our professional accountants can help establish a chart of accounts for your situation.

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4. Accounts Receivable & Accounts Payable

Q: What are accounts receivable and accounts payable?
A: Accounts receivable tracks money owed to your business by clients, while accounts payable tracks what your business owes to vendors or suppliers.

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Q: How do I efficiently manage accounts receivable and payable?
A: Automate invoicing and payment reminders, set clear payment terms, and regularly review outstanding balances to optimize cash flow.

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5. Common Pitfalls and Best Practices

Q: What are the most common bookkeeping mistakes?
A: Mixing personal and business expenses, neglecting small transactions, not retaining receipts, and skipping reconciliations.

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Q: How many hours a week does bookkeeping typically take?
A: This varies by transaction volume and complexity, but small businesses often spend 5–10 hours per month. Professional help can cut this time substantially, so that you can focus on running your business

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6. Outsourcing & Professional Support

Q: Can I do my own bookkeeping, or should I outsource?
A: Many owners start solo, but as your business grows, outsourcing can save time, reduce errors, and provide access to expertise and advanced tools. Doing your books can be risky, especially as your business grows in complexity, such as increased transactions and hiring employees.

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7. Bookkeeping Software

Q: Which bookkeeping software should I use?
A: There are a wide variety of software options available, but it is recommended to use a cloud-based system, such as QuickBooks Online or Xero. We support both and have team members who are QuickBooks Pro Advisors and Xero Advisors.

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