Small business owners often have to wear several hats to ensure the success of their businesses. Since they have so many things on their plates, they can frequently forget to tick important things off their to-do list. In this article, we discuss the importance of proper bookkeeping for massage therapists but also share ten useful tips small businesses can use to stay up-to-date year-round.
Why is bookkeeping for massage therapists important?
Before we list ten essentials bookkeeping for massage therapists should use, let’s see why proper bookkeeping is vital for their business. Accurate and proper bookkeeping is vital for any business, as it helps in providing and maintaining accurate financial records businesses are legally obliged to fill out for taxation purposes. Besides that, proper bookkeeping allows businesses to plan their budget more accurately since it’s much easier to estimate cash flow by knowing where the money goes and how many resources come in.
Furthermore, proper bookkeeping for massage therapists makes it easier to provide accurate information to institutions such as the IRS, but also investors, and lenders and secure business funding.
Lastly, accurate bookkeeping for massage therapists also helps generate financial statements, which allow them to track cash flow and analyze the company’s strengths and weaknesses.
10 Best Practices for Bookkeeping for Massage Therapists
Now, that we know why proper bookkeeping is essential for every business, let’s see what are the 10 best bookkeeping practices for small businesses.
Tip #1: Always keep track of records
Tracking records is a must if you want to run a successful business. By doing this, you’ll save countless hours while filling out your taxes and be up-to-date on where your business is at. You will know whether you’re progressing or stalling and whether you should keep going as you already do or if it's time to make some adjustments.
To make financial records as accurate as possible, you should separate your business and personal accounts. You need a business-related checking account and credit card to know whom you’ve paid and when, and vice versa. Furthermore, you should make all deposits onto your business account and then transfer money to your personal account (to pay yourself a salary for instance).
Lastly, besides knowing where your business is, tracking records will help you in case you ever get an audit by the IRS.
Tip #2: Use deductions where you can
You can save a lot of money by knowing where you can use deductions. Proper bookkeeping can help you achieve just that.
For instance, if you use a part of your home for business purposes (regularly or exclusively) you can use some home-office deductions. These include real estate taxes, mortgage interest, rent, utilities, insurance, maintenance, and repairs.
Tip #3: Keep your receipts
You should always keep and safely store your receipts. By doing this, you'll ensure you have accurate and reliable information while filling out your taxes and ensure to use some deductions your business is eligible for.
Tip #4: Track your in-demand items and services
Running a successful business means knowing what your in-demand services and items are. By knowing what your customers need and want, you can adjust your offer and improve your sales over time.
Knowing this can help you decide which services or products to promote, what special offers and promotions to run, and which services or products you should get rid of.
Tip #5: Make a budget
Making a budget is one of the most important things you can do for your business's success. You always have to know how much money goes into your business, and what your expenses are to avoid going under. That said, reports you make in your bookkeeping will help you determine what you can and cannot afford and plan your budget accordingly.
Tip #6: Use an invoicing software
Keeping track of your business finances can quickly become a tedious and time-consuming task. To make yourself some room for doing things you know how to do the best and that you love, you can always subscribe to an online invoicing software such as InvoiceBerry, for instance.
By using it, you can automate your invoicing software and save countless hours you can put to better use.
To its users InvoiceBerry allows them to turn their quotes into invoices in seconds, put recurring invoices on autopilot, send automatic reminders for late payments, use numerous invoicing templates, and so much more.
Lastly, you can store and keep your invoices on the cloud, ensuring you always have full access to important information.
If you’re interested in how this software works, you don’t even have to spend a dime trying it out. You just need to subscribe to their 3-day free trial period and see how it works before you make a final purchase.
If you, on the other hand, think subscribing to an invoicing software is unnecessary at this point (but, believe us, it never is) you can always use a free online invoice generator to speed up the invoicing process and look more professional.
Tip #7: Plan bigger purchases
The safest road to success is in proper planning. When you know how much you earn and what your expenses are, you can assess better whether and when you can make bigger purchases and avoid putting a strain on your business. Not every purchase is urgent, and you should strategically plan where to put your money.
Tip #8: Automate everything you can
The biggest advantage of running a business in this day and age is the fact we have a wide array of tools at our disposal that can help us save time and become more productive. That said, instead of focusing on time-consuming tasks, you should strive toward automatization. Check which software can help you run your business easier such as online scheduling tools, invoicing and accounting tools, and so on, and start doing things you know how to do the best.
Tip #9: Set up reminders for deadlines
Small business owners often have to wear several hats to keep their businesses afloat. However, in that mess, they can forget crucial deadlines that can make their business liable and prone to hefty fines. To avoid this, especially when it comes to keeping track of finances and respecting tax laws you, as a small business owner should set reminders for important deadlines.
You can do it on paper, Google calendar, whiteboard, or whatever it's the most convenient for you!
Tip #10: Keep track of cash payments
Just as you do with your paper bills, you should pay attention to the cash payments you make as it’s easy to forget them. Essentially, every cash your business receives should go into the business bank account before you spend it. Even if you intend to use this money on purchasing business supplies, remember it’s important to put it through your bookkeeping system.
Running a small business is hard, especially if you’re a first-time business owner. While there are many things you still need to learn and sort out, we’re confident you’ll quickly overcome every hurdle that comes your way.
Bookkeeping as an essential part of every business can seem tedious and time-consuming, but it doesn’t have to be this way!
You just need to find a system and a routine, and everything should be easier. We hope our bookkeeping tips will help you stay organized and on top of things, you just need to try them out and see if they work for you!