7 Ways That Will Make Your Business Bookkeeping Easier

Bookkeeping plays a vital role in every business growth. It gives you a picture of how well your business perform and provides useful information to help you in decision making. It helps you with budgeting, tax preparation, plan for strategic purposes, financial management; to name a few, yet, many businesses fail to implement this essential process.

Are you confused and struggling to start doing your bookkeeping? We put together 7 useful tips to help you with that.

1. Organise your Chart of Accounts 
Make your account codes simple as possible, use a 4-digit code and categorise it in subgroups. You may use 10– for assets, 20– for liabilities and so on.

2. Setup Internal Controls 
Effective internal control reduce the risk of material misstatements and ensures the reliability of the financial information. This can be broken into seven categories, each designed to prevent fraud and identify errors before they become problems.

• Separation of Duties
• Access Controls
• Physical Audits
• Standardized Documentation
• Trial Balance
• Periodic Reconciliations
• Approval Authority

3. Separate Personal and Business Finances
Opening a checking account and use it strictly for your business is one best practice you can apply to make sure you don’t mix your personal and business finances.

4. Do a Physical Count of Inventory
It is important that the inventory as per your record tallies with the actual stock. Doing a physical count will help you see any errors and correct them accordingly.

5. Monitor your Accounts Receivable and Payable
Keep track on how much customers owe you, uncollected sales is a loss to the business. On the other side, overdue bills may cause interruption to the business operation such as disconnected internet or electricity line

6. Reconcile Bank Accounts
Perform a monthly bank reconciliation to ensure the accuracy of bank balances as recorded in the books. It will also show any unrecorded transactions or even fraudulent disbursements before it’s too late.

7. Track your expenses
Manage your finances properly. Be mindful on what and how much you are spending. Some expenses may not give value to your business and would be better to reduce it or even cut it off.

So, if you are already doing the bookkeeping best practices listed above, your business is not in trouble. Please always be proactive and make sure to continue doing it.

If your business needs help, go out and seek some assistance before it’s too late.