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Five tips to get your books under control fast
One of the easiest ways to lessen your stress as a business owner is to get—and keep!—your books in order. A lot of people understandably procrastinate on that, partly because it feels like a big task, and partly because they’re not sure where to start.
We recently made some updates to Wave’s accounting features to make it even easier to build bookkeeping into your routine. This post will cover some tips you can follow to get your books in order fast—and then come back to on a regular basis to keep things running smoothly.
Tip #1: Mark your transfers
Chances are you’re making good use of a credit card—and hopefully racking up some points for a much-deserved vacation! Credit card payments are actually a type of transfer because you’re moving money from one business account to another on a regular basis.
Make sure you remember to categorize those transactions as transfers. Doing this ensures the transactions only impact your balance sheet, not your profit and loss. If both sides of the transfer exist in Wave, select the matching transaction from the drop-down menu. If they don’t, select the appropriate account when you’re categorizing the part of the transaction that does exist, and Wave will automatically create the matching part of the transfer for you.
Tip #2: Use smart invoice and bill payments
One common point of confusion is finding a double payment in your accounting records. This can happen if you’ve got your bank account connected so your transactions flow automatically into Wave. If you mark an invoice or bill paid in Wave and then that same bill payment withdrawal or invoice payment deposit imports into Wave as a bank transaction, it will show up twice in your records when there should actually only one payment.
To avoid this, wait for the transaction to import first and then categorize it as a bill or invoice payment, rather than marking the bill or invoice itself as paid. That way the payment only gets counted once, and you don’t have to go through those accidental double payments and fix them later.
If it’s too late and you’ve already made this error, don’t stress—there’s a simple way to correct it. Just use the merge function to resolve the duplication. You’ll keep the record of both actions so you have a complete and accurate history to refer back to, but you’ll only have one transaction on the books.
Tip #3: Add a customer to a non-invoice transaction
Sometimes situations happen where a customer sale doesn’t end up on an invoice. You’ll still want to make sure the transaction is tied back to the customer so you have a proper record of that sale on the books.
You can add a customer to any non-invoice transaction after it’s imported into your Wave accounting records from your bank account. That way your Income by Customer report will accurately reflect all customer sales, so you won’t risk overlooking a good customer when you’re using the report to evaluate customer value later.
Tip #4: Track sales tax as you go
There’s nothing more stressful than scrambling to figure out how much you owe in sales tax at the last minute. This isn’t an area where you want to make a mistake or you might see government penalties that add even more stress later on.
To make this easier and ensure your sales tax report is accurate, add sales tax to all applicable transactions as they happen. Whether or not a specific type of transaction is subject to sales tax varies by jurisdiction, so make sure you know the rules for your region. You can do this even quicker by selecting all the transactions that need sales tax added and add sales tax to them all at once.
Tip #5: Group similar transactions for faster bookkeeping
If you’ve got similar transactions that happen regularly, there’s no need to categorize each one individually. You can search transactions by description and group similar ones together. Then you can bulk categorize them, add sales tax, and mark them as reviewed all at once. You’ll save a lot of time with this feature if you have the same transactions showing up over and over.
Not using Wave yet? Tackle your bookkeeping—100% free
It’s really easy to create your free Wave account and hit the ground running. Simply visit our home page, click on “Create your free account” and enter your email. You’ll be up and running in seconds. Then, try one of our free webinars and download a free copy of Fearless Accounting with Wave to get started.