When you start a business, you will often have several roles to juggle including production or service, marketing, operations, sales, dispatch, invoicing, and bookkeeping of the accounts. These must all be done!
Starting Your Accounts Right (or Re-organizing Your Current Accounts)
Most business owners don’t like doing the books! But if you want to be in business then accept that the books and finances are one of your responsibilities and JUST DO IT or PAY SOMEONE to do it.
To keep accounts organised, you need a set of systems to ensure:
- ALL sales and expenses are recorded and transactions aren’t forgotten (eg Cash receipts);
- To keep all documents required by law easy to find them and neat and tidy;
- Good records of conversations with customers or suppliers; and
- At year end – a good set of all required data and reports so your accountant can complete your tax return quickly and efficiently.
Bank and Credit Cards
- First, use a dedicated business bank account and credit card. Processing your records is much easier if you have these separate bank and card accounts (even if only a personal credit card in your name to start) that you only use for business transactions.
- Secondly, request that all statements, including bank, debit card, credit card, and petrol accounts, are sent on a monthly basis. That’s because the key aspect of processing your financial documents is reconciling them on a monthly basis.
If you follow these suggestions, nearly all of your income and expenses will be captured in statements from both your bank account and credit card account and account keeping is much easier.
These are 6 steps to get your accounts off to the right start (or improve current systems).
Coming up next week we will look at some templates that can help you get organized and keep you and your accountant happy!