Get Your Books and Records Organized NOW!

by Lynnea Bylund on October 29, 2011 · 1 comment

Bookkeeping Tips For Small Business

Okay, as a small business owner you’ve decided to become more responsible with maintaining your books and records… where do you start?

Expert organizer Michelle Carley offers a tip sheet –

BANK ACCOUNT STATEMENTS

request a statement with a month-end cut-off date

saves time when reconciling records with the bank statement every month

fewer checks you will need to record as outstanding

don’t file statements and canceled checks without reviewing them

review statement immediately for unauthorized checks

BE CONSISTENT

consistency is essential to successful business bookkeeping

head your columns the same way each month thru the year

will save you and your accountant time and aggravation

CASH OR ACCRUAL

cash accounting system is much simpler

IRS only allows you to use accrual method if you have $5 million in sales

or if you carry a large inventory

DEPOSIT CASH RIGHT AWAY

deposit all cash immediately at bank or credit union once it is received

ensures that all income will be properly recorded

DEPOSIT TICKET BOOKS

record your daily deposit in a deposit ticket book

come with a white (original) copy and yellow (duplicate) copy

give the white copy to the bank and leave the duplicate in the book

DO NOT OVERCATEGORIZE

most of us tend to make things harder than they need to be

don’t need separate categories for paper, pencils, printer cartridges, etc.

all these items can simply be listed under “office supplies”

DUE DATE REMINDERS

it’s a good idea to follow a payroll tax due date reminder

whether you have a payroll service or you’re preparing returns yourself

follow a check-off list of all the required payroll tax reports

include due date, type of tax, report number, government agency, period covered

also indicate if you need to submit money, a report, or both

FILING PAID INVOICES

start new file folders each year for paid invoices and paid bills

don’t need a folder for each customer or unless large volume of business

get by with a folder for all customers from A – C, D – F, and so on

FROM PAPER TO COMPUTER

you will want to run dual systems for a few months

be sure both systems have same totals before dropping the paper

KEEP AN AUDIT TRAIL

nothing more than a record of all your invoices and checks in numeric order

the thing to remember is never skip numbers

record voids in numeric order with other items, only denote as “voided”

assures no gaps in your numerical sequence and leaves a proper trail

KEEP GOOD RECORDS

bookkeeping is the glue that keeps your business together

if your records aren’t in good shape, the business could fall apart

a healthy business is monitored through its records on a regular basis

you can find problems and correct them before it’s too late

MAINTAIN DAILY RECORDS

if no time for daily bookkeeping, when will you process a month’s records?

different people use different record-keeping systems

what matters most is that you have a system and use it daily

PETTY CASH BOX

get a metal cash box to hold currency and coins

any money used is replaced by the receipt for that purchase

cash plus receipts should remain at a constant dollar amount

continue using the petty cash box until you run out of cash

replenish the box by writing a check for “cash”, expensing all the receipts

cash the check, put into the box, starting back with the same amount again

PRINTING INVOICES

if use a many invoices each month, may want to have invoices preprinted

will look more professional and you will probably get paid quicker

print invoices with perforation — tear off and return it with payment

print your name and “remit to” address on both sides of the perforation

START AT THE END

determine expense categories by looking at tax return you will file

if you file a Schedule C, get a copy of a blank Schedule C

write down all the categories that apply to your business

include those categories when you set up your bookkeeping system

STORAGE BOXES FOR EACH NEW YEAR

keep all your records for one year in one box

bank statements, checks, financial statements, paid bills and other backup

also include a copy of that year’s tax return

label with the year and contents, then store it somewhere accessible

YOU ARE TAXED ON PROFITS

many think they are taxed on all the money they take out of their business

sole proprietors taxed on the profits of the business, not the revenue

estimated income tax payments should be based on profits

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