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Bookkeeping Tips For Small Business

 

 

Feel free to use this tip sheet / checklist as you tackle your own ""do-it-yourself"" organizing projects.   

 

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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