Thursday, November 1, 2007

24 Best Bookkeeping Tips for the Smallest of Businesses

24 of the best bookkeeping tips which will help you with your small business bookkeeping. Bookkeeping doesn't have to be completely overwhelming and Michelle Carley brings you these great tips to help you with your small business bookkeeping tasks.

  1. Keep an audit trail

    An audit trail is nothing more than a record of all your invoices and checks in numeric order. The thing to remember is never skip numbers. Record voided check and invoice numbers in numeric order with all other checks and invoices, only denote each one that is "voided." This assures there will be no gaps in your numerical sequence and leaves a proper audit trail.

  2. Due Date Reminders

    It's a good idea to follow a payroll tax due date reminder. Whether you have a payroll service preparing your payroll tax returns or you're preparing them yourself, you should follow a check-off list of all the required payroll tax reports. A good due date reminder would be customized to your business' specific payroll liabilities and include the follow information:

    Due date
    Type of tax
    Report number
    Government agency
    Time period covered
    Submit money, a report or both

  3. Be Consistent

    Consistency is essential to successful business bookkeeping. If you use a paper
    bookkeeping system, always be sure to head your columns the same way each month
    throughout the year. This small matter of consistency will save you and your
    accountant time and aggravation.

  4. Keep Good Records

    Many business owners don't keep good records. Some don't understand bookkeeping; others understand it, but may be afraid of what the numbers might tell them. Think of it this way--bookkeeping is the glue that keeps your business together. If your records aren't in good shape, the business could fall apart. A healthy business is monitored through its records on a regular basis so you can find problems and correct them before it's too late.

  5. Deposit Ticket Books

    How do you handle your bank deposits? One easy way is to record your daily deposit in a deposit ticket book. Generally, these books come with a white (original) copy and yellow (duplicate) copy in books of 50. For a small business, an order of 200 duplicate deposit tickets could last 2 years unless you make deposits everyday. As you write each deposit ticket, it is a good idea to remove the white copy to give to the bank and leave the duplicate (yellow) in the book. That way nothing gets lost.

  6. Bank Account Statements

    When opening a business checking account, you should request a statement with a month-end cut-off date. This will save you time when reconciling your records with the bank statement every month. The closer the cut-off date to the month end, the fewer checks you will need to record as outstanding. And don't to toss those bank statements and canceled checks into a filing cabinet without reviewing them. Resist the urge to do this! As soon as your statement arrives, review it before anyone else sees it, including your bookkeeper or employees.That way you can catch unauthorized checks.

  7. Petty Cash Box

    Almost all small businesses make small cash purchases. You may want to set up a Petty Cash Box to keep control of those purchases. Get yourself a metal cash box and put in currency and coin that totals $100.00, for example. . This will be your starting point. The value of this box should remain at $100.00 at all times. Perhaps you or your employee purchases a notebook at the local office supply store for $5.00, using money from the Petty Cash Box. When you get back to the office you will put your receipt in the box. Now you should have $95.00 in currency and one receipt for $5.00. The value of your box is still $100.00. You can continue using the Petty Cash Box until you run out of cash. Then replenish the box by writing a check for "Cash", expensing all the receipts, and cashing the check at the bank. After you cash the check, the new currency and coin go into the Petty Cash Box, so you'll be starting again with $100 in the box.

  8. Automatic Pencils

    Take a tip from accountants: save time with automatic pencils, since you never have to sharpen them When you need more lead you just click a button and the lead drops down. Buy one the next time you're at the office supply store.

  9. Storage Boxes for Each New Year.

    Keep all your records for one year in one box. You can put a copy of your tax return, bank account statements with cancelled checks, your BIG E-Z(r) Paper System and BIG E-Z(r) Receipt Storage Book, financial statements from your accountant, your paid bills and all other backup for that year in one box. Label it with the year and contents on the outside of the box. Then store it somewhere accessible.

  10. Filing Paid Invoices

    Start new file folders at the beginning of each year for all your paid invoices and paid bills. It's not necessary to start a folder for each customer or vendor unless you do a large volume of business with that customer. You could get by with a folder for all customers from A - C, D - F, and so on.

  11. Printing Invoices

    If your business uses a large number of invoices each month, you may want to have invoices preprinted. It will look more professional and you will probably get paid quicker. If you decide to print invoices with a perforated edge so customers can tear off one portion and return it with their payment, be sure to print your name and "remit to" address on both sides of the perforation!

  12. Note Pads with Your Name

    For a very professional look, print note pads or sticky note pads with your company name and phone number, with your slogan at the bottom. This can be a real time saver. If you also print the pad with "From the desk of . . .", plus your name, you'll never need to sign your name.

  13. From Paper System to Computer Program

    When going from a paper bookkeeping system to a computer system you will want to run dual systems for a few months. You want to be sure both systems come up with the same totals before dropping the paper system.

  14. Deposit That Cash Right Away

    Get into the habit of depositing all cash immediately at the bank or credit union once it is received. This ensures that all income will be properly recorded.

  15. Choose the Right Accounting Method. Cash or Accrual?

    Many small businesses opt for the cash system because it is much simpler. In fact, the IRS requires that you use the accrual method only if you have $5 million in sales or carry a large inventory.

  16. You Are Taxed On Profits

    Many business owners think they are taxed on all the money they take out of their business. In fact, if you are a sole proprietor (rather than a corporation) you are taxed on the profits of the business-not the revenue. Your estimated income tax payments should be based on the profits of the business.

  17. Maintain daily records

    Think about it. If you don't have time to do a little bookkeeping each day, when will you find time to record a month's or a year's worth of records? Different people use different record-keeping systems; what matters most is that you have a system and use it daily.

  18. Voiding Payroll Checks

    Before voiding a payroll check, call your state or consult your attorney to see if this is legal in your state.

  19. Keep Phone Messages Bound

    Try not to use scrap paper for phone messages. Use the bound message books you can get at any office supply store. As you return calls, cross them off. It's an easy way to keep track of unfinished business.

  20. Computer Software

    The biggest mistake people make is not taking the time to set up the software correctly when they install it on their computers. The old saying "Garbage in- garbage out" applies here. If you want a financial report you can trust, you will need to be sure it is set up correctlyfrom the start.

  21. Credit Unions

    Some credit unions offer business checking accounts at lower rates than most banks. Check it out the next time you need to reprint checks.

  22. Start at the end

    When starting a new business, determine what expense categories to track by taking a look at the tax return you or your accountant will need to file. If you are required to file a Schedule C, get a copy of a blank Schedule C and write down all the categories that apply to your business. Then include those categories when you set up your bookkeeping system.

  23. Don't over-categorize.

    Most of us tend to make things harder than they need to be. For instance, when categorizing office supply expenses, we don't need separate categories for fax paper, letterhead and printer cartridges, etc. All these items can simply be listed under Office Supplies.

  24. ATM Cards for Your Business

    Save time by using preprinted deposit tickets and an ATM card to make your business deposits.
Bookkeeping tips compliments of Michelle Carley from Big E-Z Bookkeeping Co. Michelle is an Internet-based mom who designs bookkeeping software without all the bells and whistles for under $30. Ideal for the smallest of businesses with simple bookkeeping needs. For more information visit www.bigez.com

Source : http://www.internetbasedmoms.com/


3 comments:

SBL BPO said...

Thanks for providing this helpful tips...
Regards,
http://www.saibposervices.com/Back_office_services.aspx

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Belle said...

I love your tips! As a business person, I like to keep up with the latest marketing strategies out there. I don't have much time to book keep my financial statements, so I rely on corporate payroll services for effective system. I don't have to spend extra time to train in-house accountants on how I manage my business. Payroll (Nevada) covered benefits are all settled, and taxes payments are no longer a problem.

aliah said...

great that you have shared 24 points here..:-)
thanks for sharing..
i think one thing you can also do it that.."At the end of each month, print reports to get an overview of month. Print a transaction report to compare to your bank statement to make sure you've accounted for all transactions."..
small business bookkeeping

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