Is your bookkeeping disorganized? Typically this occurs due to having insufficient time, an amateur bookkeeper, or failed efforts. By maintaining your books regularly, reviewing reports, and reconciling your accounts at the end of each month, you can avoid bookkeeping disasters. In addition, it is crucial to utilize the proper accounting software for your business, such as QuickBooks (ask a professional which version is right for you), as it is suitable for most small to medium-sized businesses. Finally, having clean books simplifies making wise business choices and helps you stay organized for tax season.
Here is a list of bookkeeping tasks that should be performed every month to help eliminate messy books:
Accounts Receivable: Review all open invoices and make sure that payments have been properly applied to invoices that have been paid. Additionally, you should check your bank account to ensure all deposits have cleared the bank.
Accounts Payable: Recurring monthly bills and payments such as car insurance and loan payments should be entered into the books. Verify that any outstanding vendor bills and statements are aligned with the Balance Sheet and Accounts Payable.
Reconciliation Of Statements: All bank and credit card accounts should be reconciled against statements at the end of each month. This process helps identify bookkeeping errors and duplicated entries. After accounts are reconciled each month, it is also a good idea to print out a copy of any reconciliation reports in case you need to refer back to them in the future. Additionally, it is good practice to reconcile loan balances and lines of credit every month.
Write Off Bad Debts: If you have uncollected debts from services performed or products sold, they should be written off typically after 120 days or when you send the uncollected debt to a collection agency. The best way to recognize bad debts is to view an open invoice report regularly.
Monitor Your Fixed Assets: Depreciation of fixed assets should be updated at the end of each month.
Review Financial Statements: You should review financial statements frequently to identify errors, absent records, and abnormal balances.
By following the above recommendations and cleaning up your books, you can gain confidence that you are on the right path. Are you behind on your bookkeeping, or do you need a cleanup? If so, it is never too late to get caught up and take control of your finances. Are you looking for someone to manage your books? If so, contact me today; I would be happy to assist you! I am an Advanced Certified QuickBooks ProAdvisor and specialize in working with clients who have QuickBooks Online, QuickBooks Desktop (PC & Mac), QuickBooks Enterprise, and QuickBooks Premier. Located in Murrieta, CA, and servicing clients nationwide!