Accurate bookkeeping is necessary when running a business. There are many reasons why you should be on top of the cash flow (coming in and going out of money). You need to be aware if you have enough cash to run your business and the most important is to know whether you are making a profit or not. You need to know the basic good and bad practices for your bookkeeping. Bookkeeping Fort Saskatewan AB hopes to provide you useful reminders so that you can be more prepared for a more successful business accounts.
Here are the do’s and don’ts to keep in mind and will help you stay on top of your accounts:
- Have a basic understanding of bookkeeping or accounting
Your business will benefit if you know how to calculate all your cash flows. If you are not knowledgeable about your books, it is hard for you to calculate the best possible profit you can obtain. We should know where each should be recorded in either assets or liabilities. Knowledge in this field will surely help you to evaluate your competitors or any business that you want to start.
- Keep your paper safe
You need to know that if your receipt is all over the place, have a box or container where you can keep your invoice and receipt. All your chequebooks and important documents should be kept in a fireproof place.
- Do your bookkeeping on a weekly basis
This is very significant when you start up a business. The more you understand about where you spent your money, the easier you will find it to manage and keep your costs down. It is important to keep your finances are always up to date. Set aside a specific time in a day to monitor your books.
- Have a proper set up business bank accounts
It is important that you should keep your personal bank account separate from your business bank accounts in order to make sure you can visibly keep track of your business accounts. Make sure that you check balances and transaction records at each bank where your company has accounts.
- Don’t use the money for other purposes other than its designated purpose
It is done to avoid mix-ups or lost records. If you are going to use the money to pay taxes and everything, never get tempted to use this money to pay other expenses in the company which is not included in the plan.
- Don’t ignore control risk
Control risk can possibly open the door to stealing and malfeasance with the company money. It is very necessary to keep it monitored. Your company shareholders and investors should be conscious of who has access to the company’s accounts. But also try to keep in mind that we should keep the number of people with these liabilities to a minimum and the owner is comfortable with who has the right to access the accounts. Do not give permission to sign cheques to anyone.
The correct presentation, preparation, and maintaining of a company’s financial statement are the crucial responsibility of the accountant and bookkeeper of the company. We hope that you find these reminders valuable and helpful for your business.