As an architect, running a firm is no easy feat and it doesn't help that you have to know all aspects of your business like marketing, sales, and finance. Although you can safely outsource marketing and sales, as a business owner it’s crucial to firmly know the verticals of your business' finances.
The United States has around 33.2 million small businesses, and it's estimated that only a third have a team of in-house accountants or bookkeepers. That implies that in most organizations it's the proprietor who has to manage finances or know how it works so that they can oversee the work of consultants.
Bookkeeping may seem daunting. However, by taking some time to understand the basics of bookkeeping and accounting, you can manage your finances effectively and avoid any potential problems.
This post will discuss what needs to be tracked, how to track it, and some tips for keeping your books in order. Here are eleven tips to help get you started! Let's begin!
Why Is Bookkeeping Important For Architecture Firms?
Many small architecture firms overlook the importance of bookkeeping and accounting. They may believe that since they are small businesses, they do not need to keep track of their finances as closely as larger businesses. However, this could not be further from the truth. Bookkeeping is essential for all businesses, no matter how big or small. Good financial record-keeping helps architectural businesses to track their income and expenses, understand their cash flow, and make informed decisions about future growth.
It is very difficult to run a successful business without accurate financial information.
For architecture firms, bookkeeping is important because:
- It provides information on the business's financial health and can help identify areas where it may be overspending or underperforming.
- It can also help to track projects and revenue, providing valuable insights into which projects are most profitable and where the firm may need to cut costs.
- And it can help small architecture firms manage their tax liability by ensuring that all income and expenses are properly accounted for.
Ultimately, bookkeeping is an essential tool for any small business, and architecture firms are no exception.
11 Tips To Help With Bookkeeping For Small Architecture Firms
Just as architecture is important to shape the infrastructure sector, bookkeeping shapes the fundamental monetary sides of any business. Therefore, you must have your basics in place to effectively foolproof bookkeeping and accounting for small architecture firms. Here are 11 tips to help you with the same. Have a look.
1. Move Bookkeeping Online
Cloud-based bookkeeping services can automatically back up your data, making it easy to recover if you ever lose it. They can also provide real-time insights into your finances, helping you make better business decisions. In addition, many cloud-based architectural bookkeeping services offer several features that can make bookkeeping easier, such as invoicing and expense tracking.
By keeping your books in the cloud, you can access them from anywhere with an internet connection. This means you can keep track of your finances on the go, and make changes and updates wherever you are. Additionally, cloud-based bookkeeping makes it easy to collaborate with your accountant or bookkeeper. You can share files and folders easily and get real-time updates on your financial status.
2. Record Income And Expenses
By tracking your income and expenses, you can quickly identify any areas where you are overspending or underperforming. In addition, by keeping accurate records, you will be able to provide your accountant with the information they need to prepare your taxes. As a result, recording your income and expenses can help you save time and money in the long run.
3. Keep Track Of Receipts And Payments
Bookkeeping generally entails tracking receipts, payments, invoices, bank statements, and other financial documents. This information can help architects and business owners make informed financial decisions and avoid costly mistakes.
By creating a system of recording, classifying, and summarizing financial transactions, architectural firms can make sure they are making a profit and managing their expenses.
4. Maintain An Accurate Account Of Your Assets And Liabilities
While your income and expenses are important to track, so too are your business's assets and liabilities. This includes everything from office equipment and supplies to credit card balances, loans, or any other debts that you may owe. Maintaining an accurate account of your assets and liabilities can help with bookkeeping for small businesses. This is because it will help you.
- Track your expenses and income, and identify any areas where you are overspending or under-earning.
- It is also important to keep accurate records of your assets and liabilities so that you can prepare accurate financial statements.
- Financial statements are essential for small businesses because they provide an overview of their financial health and performance.
5. Organize Your Records
There are so many records to keep track of, and it can be easy to let things fall through the cracks. However, there are a few simple steps that you can take to help get your records in order.
- First, make sure to keep a central location for all of your documents. This will help you to stay organized and prevent important papers from getting lost.
- Second, create a filing system that works for you. Whether you organize by project or client, having a system in place will help you stay on top of your paperwork.
- Finally, don't be afraid to ask for help when needed.
6. Calculate Your Net Income Or Loss
When it comes to billing clients and managing expenses, accuracy is key. Fortunately, several bookkeeping software programs are designed specifically for small businesses. These programs can make it easy to track your income and expenses and even help you calculate your net income or loss for the year. As a result, investing in a good bookkeeping program can pay off in the long run.
Another key aspect of bookkeeping is calculating your monthly net income or loss. This metric helps you understand how much money you are making (or losing) on a monthly basis and can help you evaluate the overall financial health of your business over time.
7. Prepare Your Year-End Financial Statement
The end of the year is a hectic time for small businesses, and architecture firms are no exception. Not only do you have to wrap up projects and tie up loose ends, but you also have to prepare your year-end financial statements. At the same time, this may seem like just another item on your to-do list, but preparing your financial statements can help your bookkeeping for the following year.
Preparing your year-end financial statement at the end of each fiscal year is important. This can include a balance sheet and income statement that provides important insights into your business's overall financial health and performance. Having all of your financial information in one place makes it much easier to track expenses and income, identify trends, and spot any potential problems. In addition, preparing your financial statements can help you stay organized and on top of your bookkeeping throughout the year.
8. Understand Your Firm's Tax Status
As a small business owner, it's important to clearly understand your firm's tax status. This information can help you make informed decisions about how to structure your bookkeeping. For example, if your firm is a sole proprietorship, you'll need to file a Schedule C with your personal tax return. This will report your business income and expenses for the year.
On the other hand, if your firm is an LLC, you'll need to file a separate business tax return. This return will report the income and expenses for the business, as well as any taxes that were paid at the corporate level. Understanding your firm's tax status can help you ensure that your bookkeeping is accurate and up-to-date.
9. Make Estimated Tax Payments
Keeping a sturdy track of expenses can be daunting. This is because there are so many items to keep track of, from office supplies to employee salaries. One way to make this process easier is to make estimated tax payments. This means that you will set aside money each month to cover your taxes instead of waiting until the end of the year. This can help you stay organized and avoid last-minute scrambling.
Additionally, it can help you keep track of your spending and ensure that you set aside enough money to cover your tax bill. Making estimated tax payments is a simple way to stay organized and save yourself some headaches come tax time.
10. File Annual Tax Returns
Every year, small businesses across the country scramble to get their financial records to file their taxes. For many business owners, this is a tedious and time-consuming process. However, this annual chore helps you with bookkeeping. By compiling all of your financial information into one place, you can clearly see your income and expenses for the year. This can help identify areas where you may be overspending or choosing to reinvest your profits.
11. Plan For The Future
As a small architecture firm owner, you know that bookkeeping is important in keeping your business running smoothly. However, with the business demands, it can be easy to let the bookkeeping fall by the wayside. One way to stay on top of your bookkeeping is to plan for the future.
By setting aside time each week to update your books, you can avoid falling behind and scrambling to catch up. In addition, planning for the future can help you identify potential problems early on and take steps to prevent them. Taking a proactive approach to bookkeeping can keep your business running smoothly and avoid costly mistakes.
How Can Fincent Make Bookkeeping Easy For Small Architecture Firms?
Fincent makes bookkeeping easy by quickly connecting with all your bank accounts to create real-time financial reports, manage your accounts receivables, and help you get relevant data to file taxes.
Here are 5 ways how Fincent helps make bookkeeping easy for you:
1. Streamlined Data Entry And Organization
Fincent automatically imports records from online banking accounts, credit card statements, and other sources to make data entry a breeze. In addition, the system is designed to be easy to use and navigate. You can quickly locate data on any transaction with just a few clicks.
2. Automatic Calculation Of Totals And Subtotals
The software automatically calculates your totals and subtotals based on the information entered into the system. No more tedious time spent adding up numbers in spreadsheets or scrambling to find the right formula.
3. Customizable Invoicing And Reports
Fincent offers ready to-use invoice and report templates out of the box and helps you create custom templates on-demand from within the software ,
4. Secure Online Access To Your Bookkeeping Information
Fincent securely saves your business' financial data online. Its servers allow individuals with login access to access the business finances from anywhere. In addition, this software gives you secure online access from anywhere at any time, so you can stay on top of your finances, even when traveling for work or working remotely.
5. Customer Support Requests Covered Under 1 Business Day
With Fincent, you get an under one business day response to your support requests to help you get the most out of its features and resolve any issues that may arise. So whether you are a new user trying to learn the ropes or an experienced user with specific questions, you can always count on great customer service from Fincent.
Overall, if you are looking for an easy and effective way to manage your small architecture firm's bookkeeping needs, then Fincent is the right solution for you. With its streamlined data entry and organization tools, automatic calculation of totals and subtotals, customizable invoicing and reports, secure online access, and excellent customer support, this software makes bookkeeping easy and hassle-free. So why wait? Sign up for Fincent today and start enjoying all of its benefits!
Bookkeeping for small architecture firms can be a round-the-clock task. However, with the aforementioned tips, we are certain that bookkeeping will become relatively easy for you now. You can start by creating a system for tracking expenses and income. This can be done using software or a simple spreadsheet. In addition, it is helpful to set aside time each week to reconcile accounts and update records.
Are you looking for an easy and effective way to manage your small architectural firm's bookkeeping needs? Look no further than Fincent – a powerful bookkeeping software that makes data entry, organization, calculation, invoicing, and reporting a breeze. Whether you need secure online access from anywhere at any time or expert customer support to help with any issues, Fincent has you covered. So why wait? Book a demo with Fincent today to start taking advantage of this wide pool of benefits!
Fincent: Your Business's Personal Financial Wizard - From Bookkeeping to Tax Filing