1. Upkeep of records
This is the number one rule: If you don’t keep concise daily records, you don’t have an accurate way to track the financial position of your business. It does not matter which system you use to keep your records what matters is that you have one and use it every day. Once this is systemized it only takes a few moments to be able to update and report on your financial position.
2. Choosing the right accounting method
The two most common type of accounting methods used in business are either cash-based or accrual-based accounting. The Cash-based method, is an “as you go” method whereby you count income when you receive it and expenses when you pay them. The accrual method has you counting income and expenses when they happen, not when you actually receive or pay them.
If your company uses credit for its transactions you generally will be using the accrual- based accounting method as the information is already presented in this fashion. Otherwise you would be best to focus on the cash-based method.
3. Month End Cutoffs on your bank statements
This is another basic tip that can reap big rewards. Synchronizing your bank statement with your other monthly records will make it much easier to fully reconcile your statement and track ongoing monthly and yearly expenses.
4. Always be prepared for an audit
Following the above steps will allow you to remain in a position whereby you will be able to provide up to date financial statements and records at any given time. Some further tips include – keeping your invoices and cheques in numeric order, not skipping cheques or invoice numbers, and keeping separate bank accounts for your business and personal funds. At any given time you should be able to trace back at least a year through your financial records successfully. If you cannot you are probably not leaving an effective enough audit trail.
5. Outsource!
When in doubt – use the professionals. Companies such as www.atpservices.com.au provide full bookkeeping, accounting and other professional services to save you from having to focus on the parts of your business that aren’t actually making you money!
Companies such as www.atpservices.com.au will save you time on bookkeeping and will reduce your accounting costs and allow you more time and flexibility to concentrate on the growth of your business.
If you think it’s all too hard, hire a good bookkeeper!!
