Bookkeeping is an integral part of accounting. It involves recording financial transactions and bookkeeping teams support accounting by overseeing the company’s financial data. A bookkeeping team is responsible for maintaining accurate books on payroll, accounts payable and receivable, and must also record daily financial entries and reconciliations. Given the importance of bookkeeping, coming up with an effective bookkeeping strategy should top the priority list of every business owner. Here are some best bookkeeping practices bookkeeping experts swear by.
Use an Accounting Software
The importance of keeping a record of all your business expenses cannot be emphasized enough. That said, you cannot expect your bookkeeping team to manually perform all daily bookkeeping tasks. To ensure your bookkeeping team has enough time to invest in more productive activities, opt for an accounting software that fits your needs and can scale with your business.
Periodically Reconcile Bank Statements and Resolve Issues Promptly
Make it a habit to reconcile your bank statements and resolve discrepancies regularly. Make sure there are no unauthorized payments.
Manage Your Accounts Payable and Accounts Receivable
Streamline your accounts payable and accounts receivable. To manage your AP and AR, establish sound credit policies. Shortening transaction cycles will help avoid workflow bottlenecks and poor cash flow. Regularly review your old accounts and send a payment reminder to clients that haven’t paid. Streamline your invoicing process and make sure that invoices are sent promptly. Pay creditors on time to take advantage of early payment discounts and avoid late payment fees.
Choose the Best Accounting Method for Your Business
There are two standard accounting systems businesses around the world use – cash basis accounting and accrual accounting. Cash accounting only records actual cash transactions, it is usually used by businesses that deal exclusively in cash. The accrual method, on the other hand, is more practical and records revenues and payments in the period they occur, irrespective of how payments are received or made. Though more complicated than cash accounting, accrual method is usually an ideal choice for businesses that invoice their clients.
Plan for Taxes
Many businesses wait till the last moment to plan their taxes. You should strive to avoid this pitfall at all costs. The chaos or pandemonium caused by waiting too long to plan your taxes can be too much to handle for your staff. Rather than waiting till the last moment, avail Santa Rosa bookkeeping services at the beginning of the financial year to streamline your processes. Ask your tax accountant to review your records regularly which will help avoid crunch time as tax season looms.
Ask the professional whether they have any recommendations that you can follow to ensure you have everything organized while filing taxes. Proper tax planning will also allow you to make critical decisions to lower your tax burden and avoid penalties.
Are your bookkeeping challenges giving you sleepless nights? Relax! Virtual Jeannie Bookkeeping Services Inc. is here to help. Over the years, we have helped many businesses streamline their bookkeeping. Our experts know accounting policies like the back of their hands. For top-notch Santa Rosa bookkeeping services, call us at (707) 664-1425.