Whether you own a small business or are a multi-national corporation, you need to have an effective bookkeeping system. Maintaining books not only helps fulfill tax requirements, but also gives you a clear picture regarding the viability of your business. Though bookkeeping is no rocket science, many businesses fail at it miserably. If you are facing problems with your bookkeeping system, relax! We got you covered. To help, wetake a look at some bookkeeping practices that every business, irrespective of its size, must follow. Read on.
1. Maintain Your Records
Bookkeeping is an ongoing process. To avoid last minute confusions when filing taxes, maintain your records throughout the year. Maintain a file that includes documents such as receipts and vouchers related to equipment and furniture purchase. Check K-1099 forms thoroughly, and make sure there are no errors. List all income received.
2. Maintain Separate Personal and Business Accounts
Mixing your business and personal finances will lead to confusion and chaos. To address this problem, accounting firms in Santa Rosa recommend maintaining a separate account for business and personal transactions. Consider using separate cards too. If you had to use your personal account to conduct a business transaction, remember to document the transaction. Maintaining separate accounts is highly advisable if you have just started your business andhave a small team or are managing books yourself.
3. Go Digital
To help your accounts team focus on more important areas, consider using cloud accounting and bookkeeping applications. These applications automate effort-intensive and time-consuming bookkeeping functions related to invoicing, accounts receivable, and accounts payable. Opt for a payroll software that enables your managers import data directly into the software.
4. Perform Self-Audits Regularly
To ensure accounting and bookkeeping mistakes do not snowball into major concerns, conduct self-audits at regular intervals. To retrace your business transactions, store your financial documents by dates. Tally vouchers and invoices with corresponding entries. Reconcile your bank records and books. If you find any discrepancies, take steps to fix the problems.
The above are some basic yet effective bookkeeping tips you must follow. Use the appropriate accounting method and keep a record of petty cash transactions. Even if following these practices produces partial results, there may be something seriously wrong with your bookkeeping system. To ensure the problem does not get out of hand, talk to our experts at Virtual Jeannie Bookkeeping Services Inc. immediately. No matter the nature and extent of bookkeeping issues you are facing, we will come up with a solution. To schedule an appointment, call at 707-664-1425. If you want us to get back to you, fill out our contact form.