When you first started your financial advisory practice, bookkeeping was likely low down on the list of tasks you enjoyed; if you're like most small business owners, that's probably still true today. Looking after clients' financial matters is one thing, but having to organize, track and report your own business transactions can be a pain - one for which you don't get paid. However, keeping on top of your books saves you penalties and interest, and can give you critical real-time insights into how your business is doing and where it's heading. Here are five tips to keep your books current with the fewest number of headaches.

SEE: The Evolution Of Accounting

1. Set up a Simple File Folder System
Even if you find it difficult to regularly input your business receipts and invoices into your bookkeeping system, keep them easily organized by setting up a filing system that stays on your desk. Label each folder with common expense types, such as meals, car expenses and office supplies. Label one folder "miscellaneous" so that you have a catch-all file for receipts that you're not sure what to do with. When you receive a receipt, file it immediately before it becomes a semi-permanent resident in the piles of paper on your desk. Keep all of your bank statements with your receipts, so that you can review them to be certain you have accounted for all of your income and expenses. When you are ready to do the bookkeeping, all of your receipts will be right where you need them.

SEE: 8 Steps To An Organized Financial Life

2. Choose a Bookkeeping Method That Works for You
The bookkeeping system that is right for you depends on many factors, including the size of your practice, the types of expenses you incur and the volume of business you do. You may choose a computerized accounting program, such as QuickBooks, or simply have your cash inflows and outflows recorded in a manual ledger. Whichever method you choose, it is important that it not be prone to human error and make sure it is easy for you to get the numbers you need to run your business and pay your taxes. Keep in mind that computerized systems don't do the bookkeeping for you. If you enter incorrect information, you'll get incorrect information.

3. Block off Time Regularly to Record Transactions
In your practice, you have to juggle the needs of many clients, plus take care of the day-to-day demands that every business owner faces. Bookkeeping is likely far down your list of priorities and this often means that it gets ignored. Getting behind on the books, however, can cost you in tax penalties and interest if you are not filing on time. It also means that you can't use your financial history in a timely manner to plan for the future.

Set aside some time every week, or month, to stay current with your bookkeeping; block it off in your day planner, turn off your phone and ignore the computer. Give the task the attention that it deserves.

SEE: Starting A Small Business: Record Keeping

4. Spend Time Reviewing Your Financial Statements
When you enter transactions into your bookkeeping system, you create balances. Your revenue and expense balances form your profit and loss statement, which tells you if you are making or losing money. Your assets and liabilities form your balance sheet, which tells you what your practice owns and what it owes.

Your profit and loss statement will be used in preparing your taxes at the end of the year, but it also gives you some important insights into how you're doing. If, for example, your expenses are consistently higher than your revenues, you are not running a profitable business and are likely to experience cash-flow problems in the near future. Knowing how your business has performed in the recent past helps you to make adjustments to remain profitable in the future. Set aside time, at least quarterly, to review your financial statements and compare them to where you thought you were going to be.

5. Consider Hiring a Bookkeeper as Your Business Grows
As your financial services practice expands, you may find that you have less time for administrative duties, including bookkeeping. Rather than letting it get behind, consider hiring a professional bookkeeper to come in for a few hours and keep you current. When deciding whether you can afford one, consider how much revenue you could generate if you spent time on client acquisition, rather than administration. Having a professional come in can be a cost-effective and efficient way to make sure you are on top of the numbers.

The Bottom Line
Bookkeeping may not be the most fun task in your financial services practice, but it is one of the most important. Setting up an easy-to-manage system and dedicating time to keeping it current, helps to keep your business profitable and on the right track.

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