Bookkeeping is an integral part of your business. If a single thing is misfiled or entered incorrectly into the business accounts, the results can be devastating. Over and beyond hiring an efficient accountant, there are things you can do to make your bookkeeping more efficient. Many of these tips may also help to make it easier by lowering the amount of time the job takes, and making an easier transition from period to period. A less stressed accountant is less likely to make disastrous mistakes, after all.
1. Don’t Lump All Social Media Together
Instead of simply placing all of your social media expenses together in a single group, try separating the different sites. Track which sites are doing the best and which aren’t exactly holding their own. This way you can invest more money into the sites actually contributing to your bottom line. This method also works better strictly for research purposes as well.
2. File Tax-Related Receipts Immediately
Filing any tax-related receipts immediately upon receiving them does not only help make it easier on your accountant come tax time. It also helps to keep your files more organized.
3. Plan Your Expense Categories Ahead of Time
There is nothing more confusing than having different expense category names from year to year for the exact same thing. Make a short list of expense categories and use those same names year after year. This leads to less confusion and less hassle.
4. Become Informed
Even though you will probably hire an accountant or outsource your bookkeeping, it is important you are well informed on how these things work. Without knowledge on finance and accounting topics you will not be able to hire contractors or make any business purchases. At the very least you should take a bookkeeping class. If possible, try to take a financing class as well. In your free time, read books and watch instructional videos on the topic as well.
5. Always Do A Thorough Review
Take time out of your day once a week or once a month to sit down with your accountant. Pour over the expense lists. Point out any errors you think were made, ask questions about things you are not sure about, and double check one or two totals yourself. This serves two purposes. First, it keeps you informed about how your business is doing. Second, it ensures your accountant is staying on their toes.
Reward success. This applies to all parts of your business, but can be extremely effective in your accounting department. Perhaps you could offer a yearly bonus to people who make zero mistakes. Or you could reward people who come up with ideas that help your bottom line. This ensures everyone is working to their fullest potential, thus making less mistakes.
These six tips are incredibly simple to execute yet they can drastically improve the effectiveness of your bookkeeping. By keeping your accounting as simple as possible, and your accounting staff happy, you can eliminate 99% of all bookkeeping errors.