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Useful bookkeeping hints
Keep and maintain daily records – Different businesses use various record-keeping method, any method will do as long as you have one and use it everyday for you to have an accurate daily records to have a specific way to track the financial condition of your business.
Secure a copy of a bank statement with a month-end cut off - It will be easier for you to reconcile your statement and track expenses if you have monthly records in hand.
Find and use the right accounting system – There are two types of accounting system you can use, the Cash-based method in which you count income when you receive it and expenses when you pay them and the Accrual-based system which you count income and expenses when they happen, not when you actually receive or pay. It is up to you what to use depending on what will suit your business and what will be much easier for you.
Set-up monetary limits for checks - Create a special account for paychecks and keep all other checks made out to business and not individuals. File your checks in a cabinet which is locked and secured.
Hire an accountant - If you are very busy with your business, you may need to hire an accountant to keep track of your transactions. You can get a part –time accountant that charge at an hourly wage, by that there will be someone who will help you stay updated of your financials while your busy with your business.
Use a computer – Computer bookkeeping software is a big help for any businesses. These will simplify income and expenses tracking. The application will also make it easy for you to prepare tax documents, summarize company’s financial activities and back up records for safe keeping. Make sure you hire a bookkeeper that knows how to use a computer.
Organize an audit trail - Keeping records will be more effective if they are all organized and synchronized. In that way it will be easier for you to retrace your business’ financial activities. File your invoices and checks in numeric order, making sure not skip check or invoice numbers and keeping separate bank accounts for your business and personal funds.
Review cheques carefully – Cheques are as good as cash, and so you have to take good care of them as how you do with your money. If something goes wrong, it will affect you not the bank. Sign it using a clear and distinctive signature to avoid forgery, if your business is a partnership, it will be better to have at least one of the partners co-sign the cheques. Take time to review canceled cheques before anyone else,in that way you can track and catch unauthorized cheques.
Bookkeepers - are the ones who record transactions into journals, making sure that the numbers are available at the end of the month for the accountant to prepare formal financial statements
Accountants - are the one who design and set up the system that the bookkeeper will use. They do the monitoring of the results, take the data entered by the bookkeeper and prepare monthly financial statements and tax returns. If the business owner will allow, an accountant may also prepare budgets for management and manage those budgets
Be updated of the new policies - Stay on top of the new policies because rules regarding taxes change every year. Taking a class or reading books about accounting rules will make you aware of every change.
Accountancy prices differ widely, and a cheaper option which is becoming increasingly popular is online accountancy which is similar to email being an electronic version of traditional mail. It removes the expensive way of sending through registered post or courier and also
Posted by eziaccounts.com.au
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