Plan :: Some Bookkeeping Tips

Some of My Favorite Bookkeeping Tips

· KEEP THINGS SEPARATE

o Keep your business and personal records and transactions separate from one another. You should have separate bank accounts and credit cards for your business and personal use. Purchases that are related to your business should be made with a business credit card or with a business checking debit card. This makes it a lot easier for your bookkeeper and tax preparer to easily determine expense categories.

· KEEP GOOD RECORDS

o Keep and file all of your receipts, invoices, bank and credit card statements and any other documents pertaining to your business. Make sure to use a system that is easy to follow. Just a few minutes each month can save hours at the end of the year.

· AUDIT TRAILS

o An audit trail is a sequential list of checks and invoices. This listing should include any check or invoice numbers that have been voided so that there are no gaps in the sequence. A proper audit trail should allow you to go back and reconstruct your company’s finances for any given period.

· MONTH-END CUTOFF FOR BANK STATEMENTS

o Ask your bank to have your account statements cut off at the end of the calendar month. This makes it easier to track expenses for each month and to reconcile your statements.

· BE CONSISTENT

o Keep your files and records consistent from month to month and from year to year. Use the same column headings on spreadsheets. Use the same system for filing invoices and paid bills. This consistency will save your accountant time.

· REVIEW AND RECONCILE YOUR BANK AND CREDIT CARD STATEMENTS

o This process allows you to catch any errors that either you or the bank may have made, to make sure no unauthorized checks have been cleared and to make sure your bank balance and accounting records balance match.

· STORING RECORDS AT THE END OF THE YEAR

o Be sure to file each year of financial records separately and label the box(s) clearly. This makes things easy to locate if any questions come up after the period has ended and the files are no longer active.

· DON’T HOLD ON TO CASH PAYMENTS

o If you receive cash for payment it should be deposited right away. This ensures that it is not lost or used for purchases before the income is correctly recorded.

· JOURNAL YOUR ACTIVITIES

o Carry a small notebook to keep a record every time you go somewhere and do business. If you write down your mileage and expenses as they happen you are more likely to capture everything.

· HOW MUCH TIME ARE YOU SPENDING ON BOOKKEEPING

o Keep a record of how much time it takes you to keep track of your finances. This can help you decide if it is worth your time to perform the task yourself or hire a bookkeeper to do it for you.

Brought to you by Wendy Conte, CB ~ 661-993-9313 ~ wendy@conte.net