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6 Bookkeeping Tips to Start Implementing Today
Whether you’re a new company or one with a long history, bookkeeping can be overwhelming. Bookkeeping keeps track of all revenues and expenses of your company, and if not handled correctly, can impede business success.
Here are a few tips that bookkeepers should start implementing today to ensure their company is continually on track and cut down on mistakes and lost information.
- Check Your Accounts Receivable Weekly
It’s important to make sure customers pay on time. Whether they are supposed to pay invoices on receipt or net 30, keeping track of payments is essential. If a customer doesn’t pay, that directly reduces the income your company is generating. A good rule of thumb is to run Accounts Receivable Aging Reports at least once a week. If customers are more than 30 days late, start chasing them for payment.
- Pay Your Bills on Time
Ensure bills are entered as they are received so that no bills are missed. Also, be sure that when entering bills in the system, the date received and the due date match those on the bill.
- Concise Chart of Accounts
The Chart of Accounts should be as concise as possible. It is meant to define each class of items rather than list each item separately. For example, if you sell a product, you should not list every product on the Chart of Accounts. Instead, you should categorize them into classes. Each individual product would be listed on the Item List.
- Reconcile Bank Statements Each Month
All bank accounts should be reconciled when monthly statements come in to ensure that all deposits and payments are recorded correctly. Waiting months to do this could make it more difficult to find missing information, and financial statements won’t be up-to-date.
- Apply Payments as Soon as Received
If you take credit cards over the phone or receive checks by mail, it is important to record payments as soon as they are received. It ensures that the Accounts Receivable Aging Report is up-to-date.
- Use the Memo Section
You may notice a description or memo on sales orders, invoices, bills, estimates, etc. This is not just for looks. On bills, the memo is used to describe what was bought. On sales orders and invoices, the memo should be used to include small notes for anyone that has access to the system that needs to know important details, but it should not be included on the customer-facing document. It should also be used to identify reasons for voiding invoices or sales orders, which can provide insightful information for future use.
Use these 6 bookkeeping tips to keep your company on the track to success!
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