All types of organizations have activities and need to keep track of them. What do you need to do to make sure you manage your books correct?
Here are some tips which will help you to effectively manage your books:
- Choose bookkeeping software that serves your needs.
Using the right software can make the job of maintaining and reporting financial data easier. To be flexible and efficient, organizations can use accounting software that allows them to work with outside accountants and bookkeepers. To do this, they need to use bookkeeping programs, like Quickbooks or Xero, that are cloud-based and can accommodate all the organization’s needs.
- Record transactions properly
Understand how revenue and expenses are managed in your organization. For example, your revenue may include different types of sales and services or investment income. Expenses can include payroll, utilities, cost of goods sold, and management expenses. It is always a good idea to check accounting standards and generally accepted accounting principles (GAAP).
- Retain support documents.
It is very important to keep all your support documents organized and in a secure place where they can be accessed quickly. Dropbox and Google Drive are handy applications to use when you need to keep and share all your documentation in one place. QB, Xero, and many more bookkeeping software programs offer attachment options for each transaction which make audit and management very easy.
- Double check and reconcile your books on a regular basis.
Once you have your bookkeeping system working and your books ready for reports and future decisions, it is very important to double check your bank statements and all support software you may use to record transactions. Why is this important? Because even with automated programs, we still experience double entries, human error and connection issues. As little as one transaction wrongly or double recorded may lead to expensive financial wrong decisions or an incorrect tax return filing. By doing reconciliations every month you can spot errors and avoid potential problems.
Reports are a major reason why you keep track of all your transactions. Financial reports include the statement of financial position (Balance Sheet), the statement of cash flows and statement of activities (Profit and Loss). Good reporting helps your organization not just in filing your tax returns and financial evaluations, but also in your future decisions such as financial operations (cutting costs, avoiding delays, etc) and payroll cost planning, etc. It also helps you to know where you stand with your budget and spending.
- Outsource tasks when they can be more efficiently done by others.
When you are in small business, prioritizing and focusing are important to be able to accomplish the goal of making a difference. Sometimes individuals become overwhelmed by trying to do all the financial tasks themselves. It’s important to divide responsibilities between the staff and outsource the time-consuming tasks that can be done more effectively by others.
At KHL, we specialize in bookkeeping and accounting services for small businesses. We would be happy to advice and help you in this field. Submit a form or give us a call at 919-283-6098 for a free consultation.