Small business owners are juggling flaming torches. To say the least.

There are customers to delight, products to perfect, marketing campaigns to launch, and, so much more.

And of course, there’s bookkeeping.

While it’s tempting to push financial tracking aside for the more exciting stuff, solid bookkeeping is the foundation of any thriving business.

Getting your small business accounting practices in order early—tracking revenues, expenses, and profits—will keep you from drowning in paperwork or getting blindsided by cash flow issues.

You might manage to handle the books yourself in the beginning. But as your business grows (and tax season approaches), things can get a little messy.

Now, factor in the tough economic climate:

Bankruptcy filings for small businesses in America skyrocketed 78% this past year.

And the stakes are even higher.

With rising interest rates and economic uncertainty, small business owners have to navigate choppy waters just to stay afloat.

But here’s the silver lining:

By tightening up your bookkeeping processes now, you’re setting your business up to thrive, no matter how rough the business cycle gets.

This blog will dive into five essential tips to assess and improve your bookkeeping practices.

We’ll also show you how doola can help keep your financials on point, so you can focus on what really matters—building and growing your business.

1. Review Financial Statements

Your financial statements—balance sheet, income statement, and cash flow statement—are the pulse of your business.

Reviewing them regularly gives you a clear picture of your business’s financial health. But the key is not just glancing over the numbers.

Dive deep to ensure everything lines up.

Are there unexpected expenses? Are your profit margins where they should be?

Doing this monthly helps you spot trends and address any issues before they snowball.

How to Assess:

Start by pulling your statements for the last three months. Compare them to see if your income and expenses fluctuate significantly.

If you notice unusual trends, it’s time to investigate.

How to Improve:

Implement a monthly financial review process.

It might sound like a lot, but setting aside even a few hours each month to go over your statements can help you catch problems early and plan for future expenses or growth.

Alongside, you need to effectively manage accounts payable and accounts receivable to maintain a consistent cash flow.

Here are a few tips to consider:

• Issue clear credit policies and perform credit checks.

• Create clear payment terms for vendors, suppliers, and clients.

• Build and automate an approval process.

• Track due dates on your bills and invoices regularly.

• Always try to negotiate your payment terms.

• Try to leverage early payment discounts.

• Use electronic payments and issue invoices promptly.

Implementing these tips helps you optimize cash flow, mitigate financial risks, and maintain healthy business terms with your suppliers, clients, vendors, and customers.

doola Insight

At doola, we make reviewing your financials a breeze. Our bookkeeping services ensure your statements are always audit-ready, with detailed insights that help you make smarter decisions.

We don’t just track numbers—we help you understand what they mean for your business.

2. Separate Your Finances

If there’s one rule every business owner should follow religiously, it’s this:

Keep your personal and business finances separate.

Blurring the lines between the two can result in a bookkeeping nightmare, complicate tax filing, and even expose you to legal risks.

Opening a dedicated business bank account makes tracking business expenses and income so much easier—and it’s a simple step that pays off in the long run.

How to Assess:

Check your financial records for any personal expenses that may have slipped in. It’s a common issue for small business owners, especially those just starting out.

How to Improve:

Set up a business bank account and a credit card exclusively for your business. Use them for all business-related transactions to maintain clean and organized records.

doola Insight

When you form your business with doola, we help streamline the process of setting up your LLC and guide you through opening business bank accounts.

From LLC formation to tax compliance, we’ve got your back every step of the way.

3. Automate it All

Or at least, automate as much as possible.

No one wants to spend their time manually entering data into spreadsheets. Not only is it time-consuming, but it’s also prone to errors.

By automating your bookkeeping tasks, you can save time, reduce mistakes, and focus on what matters most—growing your business.

How to Assess:

Take a look at your current bookkeeping processes. Are you manually inputting every expense and invoice?

If so, there’s room for improvement.

How to Improve:

Invest in accounting software or services that automate invoicing, expense tracking, and financial reporting.

This reduces human error and ensures that your books are always up to date without the hassle of manual data entry.

doola Insight

With doola’s bookkeeping services, automation is built-in.

We take care of tracking your income and expenses, generating financial reports, and keeping everything in sync.

This means less time on paperwork and more time focusing on your next big move.

4. Track Every Expense

It’s easy to overlook small expenses when you’re running a business. A quick lunch with a client here, a few office supplies there—but those small costs add up fast.

Tracking every single expense, no matter how minor, is essential for accurate bookkeeping.

This habit not only gives you a clear view of your financial health but also helps when it’s time to claim tax deductions.

How to Assess:

Review your expense records and seek answers to questions like:

a. Are you missing small transactions?

b. Do you have a system for recording receipts and invoices as soon as they’re incurred?

And now lets see how you can improve this situation.

How to Improve:

Set up a system for logging expenses immediately. Use an app or software that lets you snap photos of receipts and categorize transactions in real-time.

Along the way, you also need to establish effective budgeting and forecasting processes.

These processes help you make data-backed, row-risk decisions related to future expenses and incomes based on market trends and historical data.

Here are a few techniques you can benefit from:

a. Zero-Based Budgeting:

Start your complete budget cycle from the ground up. This will help evaluate your expenses better and ensure all costs are justified.

b. Historical Data Analysis:

Always leverage historical income and expense data to predict patterns. This will enable you to establish accurate forecasts and budgets.

c. Incremental Budgeting:

This involves adjusting previous budgets based on expected changes due to expansions, increased cost or inflation.

d. Sales Forecast:

Always refer to historical data while performing sales forecasting. This data can be in the form of market trends, customer behavior, or other associated factors.

Using the above techniques, you can easily build a robust financial plan to improve resourced allocation and navigate fluctuating economic conditions.

doola Insight

Our integrated bookkeeping system helps you categorize every expense, ensuring you never miss a deductible.

With doola, you’ll stay tax-ready all year round, making those small expenses work in your favor during tax season.

Consult a doola tax expert today.

5. Professional Bookkeeper or Service

While DIY bookkeeping can work in the early stages of your business, as you grow, managing your finances becomes more complex.

A professional bookkeeper can bring expertise and insight that goes beyond just balancing the books.

They’ll ensure your financials are organized, compliant with tax laws, and optimized for growth.

How to Assess:

Are you finding it hard to keep up with your financials? Do you feel overwhelmed during tax season?

If so, it might be time to bring in a pro.

How to Improve:

Outsource your bookkeeping to a trusted service provider.

A professional will not only save you time but also provide valuable financial insights that can help you grow your business more strategically.

doola Insight

At doola, we provide bookkeeping services designed specifically for small businesses.

Our experts ensure that your financials are always accurate and up-to-date, helping you stay compliant and ready for whatever growth opportunities come your way.

From tax compliance to financial reporting, we’ve got you covered.

Next Mile: Level Up with doola

Incorporating doola’s tailored strategies into their small business routines has been a game-changer for founders across the globe.

By regularly reviewing financial statements, separating personal and business finances, automating processes, tracking expenses, and seeking doola’s help, founders from 175 countries have scaled their businesses.

So what’s next for you?

Join the doola Ecosystem

When it comes to keeping your books in top shape, doola is more than just a bookkeeping service—we’re your financial partner.

Our ecosystem of expert resources, tax compliance tools, and business formation guidance is designed to give small business owners the clarity and confidence they need to succeed.

Ready to take your bookkeeping—and your business—to the next level?

Book a free consultation with doola today and discover how our tailored services can keep your finances on track while you focus on growing your dream.