Last Updated on April 8, 2016
For businesses today, bookkeeping is one of the most important and critical aspects for keeping company financially sound. Below are 7 great tips for bookkeeping professionals to use in their day to day business processes.
1. Accounting System
There are two basic types of accounting systems a company will have a bookkeeper use. One is cash-based and the other is accrual based. With cash, you count the income as it comes in and you deduct the expenses as you pay them out. With the accrual process, you only count the income and expenses as they occur, not when you pay or receive the services. If the company a bookkeeper works for has credit transactions or inventory, the accrual method will probably be the best method to use. As well, if the business you are bookkeeping for makes over $5 million in sales, the IRS could require you to go with the accrual system.
2. Daily Records
This is a basic but important rule. If you don’t accurately keep records, you won’t have an accurate way to know what the financial status of your business is nor how to track it. Different bookkeepers and companies choose different systems to keep records. It does not matter which you choose, but pick one and use that same one every day. When you have a good system established, your record keeping will be a breeze.
3. Handle Checks Carefully
It’s easy to do things quickly when you’re used to it like writing out the checks and pushing the cancelled checks into the cabinet without really looking at them good. Checks are like cash and if something is wrong, the bookkeeper will be the one sitting on the hook. Take time and care when it comes to the companies checks just as you would your own cash. Make sure checks are signed distinctively so that there is no invitation to forgery. Look at cancelled checks that come back so you can catch things that may have been unauthorized.
4. Bank Statement
Another basic but important tip is that you should work to synchronize your statement from the bank to be timed with the other records you have monthly to reconcile your statement much easier and have the ability to track expenses better.
5. Audit Trail
Always have a system in place that will allow you to track and retrace all of the company’s financial transactions. Keep checks in numerical order as well as copies of invoices. For audit purposes, you should always feel comfortable that you can go back an entire year and re-do the finances of the company. If not, you don’t have a good audit trail.
6. Use a Computer
Using good computer bookkeeping software is a great idea for all bookkeepers. These programs make it easy to track expenses and income, get tax documents together quickly, give a summary of the financial status of the business and keep records safe and easily accessible.
7. Business Credit Card
Using a separate business credit card to help track expenses better is a great idea. Only use the card for business purposes. This will help to cut down on receipt copies as your monthly statement can be your financial record.
Remember that as a bookkeeper, your job is to keep accurate financial records that are in compliance with all the government regulations. The more organized you are, the more organized the business will be.
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