03 Jun 3 Things You Can Do to Make Your Bookkeeping Easier
1. Edit and number your chart of accounts.
If the framework of you accounting is a disaster your bookkeeping will be a disaster. Your chart of accounts drives your reporting. Keeping your framework organized will help you to be clear and clean in your accounting. Too many or too few accounts will not give you the clarity in your financials that you are looking for. Be sure you only have the accounts you need to accurately report the financial activity of your company too many unused accounts makes your work slower and contributes to mis-posting of transactions. A chart of accounts that is too basic will not tell the full story of how your business is doing. If all your sales from three different profit centers post to one account and all your expenses are posting to one account called expenses then you probably aren’t seeing the full story in your financials. Numbering your chart of accounts allows you to be consistent in your coding (where you post things) and makes delegating the task of simpler things like payables entry easier. We require that all of our customers use account numbers so that they can write on a bill a four digit number and anyone in my office will know where it should be posted during data entry.
2. Organize your paper files.
When you have a question if you are searching through a stack of paper a mile high, or a basket or box in your office, it makes an joyless task even more difficult. Make sure you can find a vendor invoice, last months bank statement and those employee files quickly even years later. Answering any financial question should take less than 10 minutes even from a paper file. Inexpensive plastic file boxes work well to protect your files and allow for easy expansion and relocation and are great for businesses that can’t afford a $300 file cabinet.
3. Don’t let tasks linger.
The longer a task lingers the more of your time it sucks up, the vaguer the details get and the bigger the problem will become. It is extremely difficult to figure out something and fit it into your accounting and records 12 months after it happens. If you have a question about a bill from a vendor call and ask for clarification right away! Don’t call them 6 months after it is due or even worse wait for their collection agent to call you. This theory applies x100 for any government agency notices and letters. Reading that email from your customer 7 times before you respond only wastes your time. 5 minutes each time you read it over and thought about responding times the six extra times you read it equals half an hour of your life you will never get back. Create a folder on your desk in a prominent place for pending items and things to be finished up and work on it every day until tasks are completed.
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