This first of the small business bookkeeping tips is something many small business owners don't do, but should.
All new business owners should make it a priority to open a new bank account for their business, preferably an account with online access, to keep business funds separate from personal funds.
Processing transactions for your personal expenses within the bookkeeping of your business is an inefficient use of time.
It’s even worse if you are outsourcing and paying a bookkeeper to process your accounts with these personal expenses mixed in…
… And they will have to be processed if they are mixed up with the business transactions. They have to be entered into the bookkeeping system and coded to drawings, taking up precious time that the bookkeeper could just spend entering business data.
If you need to use business money for personal expenses, just do a bulk transfer to your personal account on a regular basis like once a fortnight so that the bookkeeper isn't having to deal with a million small personal transactions and making you pay for their time.
Also, open a business savings account and set aside money from your business earnings every month to pay your quarterly tax. Calculate a percentage (25-30%) of your Income and transfer it over before you spend it. Maybe do it the minute your customer pays you.
Bank accounts with online accessibility is definitely the way to go now. It is quicker and easier to login online to make payments and keep up with the bank reconciliations in your bookkeeping software, than to wait for the bank to post a statement, or writing out checks/cheques to make payments.