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Small Business Must-Do: Good Bookkeeping Habits

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Published on : Sep 01 2011

 

It takes a lot to grow a small business. It not only requires that you, the busines owner, be skillful in providing core products or services but also in running the daily operations that are required to ensure that you are delivering your products and services in the best possible way. This is the key to growing a dynamic business.

 

One important “behind the scenes” aspect of the daily operations includes accounting and bookkeeping. To put it simply, it is a must that you keep good books. Otherwise, you may find out too late that you are in the red or have missed filing the correct IRS documents on time, thereby resulting in a big financial penalty. Proper bookkeeping practices can actually help your business to succeed and PASBA has been helping small business owners for years to locate a qualified accounting professional.

 

Below are some tips to remember each month in order to maintain successful small business bookkeeping practices:

 

Record your receipts and invoices in numeric order. This will help you maintain an audit trail, which ensures there are no gaps left unreported. If your receipts (as well as invoices) are all numbered, it is easier to check whether a payment or invoice has actually come through. When checks, receipts or invoice numbers need to be voided, these numbers should be duly noted and recorded.

 

Record due dates for payments and payables. Reminders of an upcoming payment help you and your team manage your cash flow and ensure that these obligations are met promptly. Payments include payroll taxes, regular bills (such as rental and utilities), payroll and so on. Reminders of payables becoming due will help you avoid late fees.

 

Maintain consistent records. Your small business accountant will appreciate you keeping good records and being consistent. Using the same system throughout your record keeping procedure makes it easier for everyone.

 

Keep daily records. It is best to record daily transactions. If you are using a bookkeeping firm, then ask them to explain what daily transactions you should record. Don’t let this pile up! Stay on top of record keeping chores.

 

Keep proofs of transactions. Receipts, paid bills, deposit slips, sales slips and invoices should be organized and kept in their proper folders for easy reference. You may find that you often need to refer to these proofs of transactions as you deal with your suppliers and customers.

 

Keep track of bank account statements. Reconciling the bank statement is best left to a pro. This is the easiest way to keep accurate data or catch unauthorized activity. Keep all bank statements filed properly in a folder. Often, it is necessary to go back several months and verify that checks and deposits were made and when.

 

Maintain a petty cash box. Be sure to ask your PASBA bookkeeper to help you organize your petty cash system so that it is easy to maintain. This is one area where many small businesses struggle.

 

Secure your paperwork. Keep records in a safe and preferably fireproof place. Use separate boxes for each year on record. If you are keeping your records at home, it becomes all the more important to secure your paperwork and keep it away from children to prevent your losing important documents. Some businesses rent a small storage space where they keep all their company documents and important papers.

 

The Professional Association of Small Business Accountants (PASBA) assists small business owners in finding that perfect Certified Public Accountant or bookkeeper who will keep their business moving in the right direction.

 

PASBA member accountants bring the collective resources of a nationwide network of Certified Public Accountants, Public Accountants,  Enrolled Agents and other practitioners available to answer your tax and financial questions and streamline your business accounting, bookkeeping, and payroll operations. To find a trusted accountant in your area, visit www.SmallBizAccountants.com.

Please be advised that, based on current IRS rules and standards, any advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty that the IRS may assess related to this matter. Any information contained in this article, whether viewed or subsequently printed, cannot be relied upon as qualified tax and accounting advice.  Any information contained in this article does not fall under the guidelines of IRS Circular 230.

Copyright Information 2011 Professional Association of Small Business Accountants

 

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