Having the bookkeeping conversation may cause yawning and rolled eyes to some! But is not such a boring issue to the HVAC small business owners who have been audited and lost thousands of dollars due to bad judgement calls. As a premier El Paso bookkeeping service I hope you find my 5 HVAC Bookkeeping best practices for small business article useful as is packed with resources you can use to get a grip on your small business finances.
El Paso Bookkeeping Service Blue Pearl, Perla Diaz and team:
1) The Obvious one: Don’t Mix Personal Expenses With Business Expenses.
I know how common this is and how tempting!!! When you are starting out you may be tempted to pay for things out of your own bank account or credit card. This may be ok when you are first starting, granted you need to pay upfront for certain things prior to having your own EIN and bank account right? But once you have a bank account. Give yourself a budget or get a loan and deposit that money directly into the business account and maximize that budget so that you don’t have to borrow from yourself. If your business has been operation for a while; you definitely do not want to mix money because the IRS takes this very seriously. Like money laundry serious. So don’t mix money.
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Not mixing them also keeps things easy to sort out.
2) Technology Is Your Biggest Friend.
Whether that technology is handled by a professional like us at Blue Pearl Bookkeeping & Tax Services of El Paso or you have an in house accountant or bookkeeper. Software allows you to keep track of your finances better than Excel or Google Docs would, but in the case that you can’t afford to hire a bookkeeping service yet because you are just starting out. Having Excel is better than piece or pieces of paper. We highly recommend that small business owners adopt a basic software program early on and make the decision to talk to an expert even if is to get answers and guidance. Assuming you know what you are doing, with software at the touch of a button, you’ll be able to:
- Create invoices and send them out in less than a minute
- Create estimates that you can convert into invoices
- Track and manage your expenses
- Easily see which invoices are past due
- Generate a profit and loss statement for your accountant at tax time
The most popular software we see small business owners for bookkeeping service is QuickBooks Online.
3) Ask For Help.
So you know you’re not as organized as you should be, maybe you’re not making as much as you would want. That’s perfectly ok! Don’t be embarrassed even remotely. If you know someone who can help you with a clear and professional guidance – PLEASE ASK FOR ADVICE. ASK FOR HELP. Take advantage of any opportunity you can get for personal and professional growth.
At Blue Pearl, we like to be of as much Bookkeeping and Tax help as possible and we’re always being approached with questions and challenges from HVAC Service companies and other business owners. If you have any questions about your particular situation – send us a message here.
4) Stay Organized.
Even if you do have a dedicated accountant, you should make organizing a regular habit of your own. The only way to know where things really stand, to avoid mistakes or have things fall through the cracks, is to consistently check your books.
Another healthy record-keeping practice is to store your files electronically. We love Dropbox for example and make sure to back up any files we store locally once every month. We recommend you do the same, consider also using Google Drive.
Most importantly, figure out a system that you can scale. We have seen businesses almost die from a lack or organization and good bookkeeping system.
El Paso Bookkeeping Service Tip 5) Track Everything.
As a small business owner on the heating and cooling industry you are probably buying a lot of HVAC units which means you need to track more than other type of businesses because the purchases are typically done in advance to inventory (which has its own cycle) or with deposits made to you by a customer upon agreement of work. You must track anything and everything related to your business by saving receipts, using a dedicated business credit card and bank account. Not only will you need to track activity to see how much you’re profiting but also for tax purposes at the end of the year.