Bookkeeping on a daily basis can be a mundane task. As a result, it’s critical to remain vigilant and now allow lackadaisical practices to creep in. Bad habits can form quickly, and they can be fatal to a business.
Here are three easy tips to improve your bookkeeping and overall small business accounting procedures.
Perform a monthly audit. While you may not have the time or resources to perform a thorough audit every month, spending some time to review the accuracy of your books and to make any adjustments (I’m not talking about adjustment entries, but actual bill amounts versus a memorized transaction entry, filling in memo lines so that expenses and sales are quite quickly able to be understood, etc.) to get the books in order. A great time to do this is after or during your monthly bank account reconciliations.
Do a weekly (at least weekly) backup. If you’re not already using a cloud bookkeeping service like Xero or Quickbooks Online (you really should be, more on this later), you have got to be performing regular back ups. As ransom ware becomes more mainstream, you’re playing with fire if you’re not taking care of and protectcing your data. It’s amazing how many people think that they are backing up their Quickbooks or Sage desktop versions only to realize that they aren’t. Even backing up to a local disk is simply not enough. Ideally, if it makes the most business sense to stay with a local desktop version of your accounting software, the least you should do is perform a back up and then store it in a cloud storage account, such as Google Drive. This allows you to have a safe back up should the unthinkable happen.
When in doubt, keep notes. It can be easy to come in and start entering invoices and bills without much thought, but often times different invoices need to be charted differently. Perhaps it’s as simple as charting expenses in a job related account, or perhaps an asset is also a deductible expense and vice versa. We come upon these variables on a daily basis and often times just make assumptions. We have to, of course, because our assumptions are based on experience. However, I’d recommend keeping a notebook handy so that you’re able to write down how you treated those items. This allows for you to go back and remember your thought process should you need to revisit them.
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