What Are The Principles Of Good Bookkeeping For Small Businesses?
Your small business accounting system may still be in progress, but there are a few crucial things to set up as a part of your system. Here are some of the most important principles of small business bookkeeping.
Have an Excellent Record Keeping System
The first step to an excellent bookkeeping system is to have a process for organizing your records. The first part of this is deciding how to store your receipts and invoices for future reference. You may want to clip together the relevant bills and receipts by month when filing them away. But you'll also need to have an organizational system for papers that haven't been processed yet; a bookkeeper can help you think about how to keep track of bills that haven't been paid, ones that haven't been recorded yet, and ones that haven't been approved yet.
Enter Records on a Regular Basis
You may have several tasks that you need to do regularly; for instance, you'll need to reconcile your credit and debit cards, your bank statement, and your vendor bills and invoices. This can become a difficult process if you're not entering your information into the system on a regular basis, since one piece may depend on several others. Sit down with your bookkeeper and create a monthly schedule that allows each task to flow seamlessly into the others, and don't get behind on entering your records.
Thinking About Audits
The next thing to consider for organization is thinking about what information you'll need to access quickly, such as in the case of an audit. For instance, if you've listed a major tax write-off or had unusual activity on your accounts, or if you've taken advantage of a tax loophole, then you'll want to make sure that information is easy to access. This could mean placing markers on certain files, or even doing test runs to make sure that you can quickly locate information you need to find.
While you can do some of these on your own, it's often beneficial to hire a small business bookkeeper to keep your records in order. Especially as you are first starting out, a bookkeeper can make sure that you are following the correct accounting principles and avoiding the common mistakes that can create errors in your records. However you choose to implement your bookkeeping process, it's important to stay consistent with your records, since even small mistakes can add up to a lot of time during an audit. For more information, look into bookkeeping services by Nathan Professional Corp or a similar company.