Accounting and Bookkeeping tasks are all too easy to push to the back burner, but that only creates a bigger mountain to climb in the future. Staying on top of basic bookkeeping needn’t be a huge chore with these timesaving ideas.
Develop an Accounting System
A system keeps you on track. At a glance, you can see where you’re up to and what needs doing. It banishes procrastination because you can just get on with the job.
The simplest idea for paper records involves clear plastic folders you can store in a ring binder. For this system, you will always have two active folders – one for new stuff that needs processing, and one for papers you’ve dealt with. You’ll need 13 in total, 12 labelled January to December, and one labelled ‘active’. All live in a ring binder labelled with the financial year it relates to.
As you gather receipts or other papers through the month, it all goes in the ‘active’ folder. At the end of the month go through everything, dealing with it as necessary, then moving it into the ‘month’ folder it relates to. You don’t have to wait until the end of the month. If you pay a bill mid-month, put it straight into its ‘month’ folder. Only put in the ‘active’ folder those things that you know you need to deal with but can’t take care of immediately. It’s your filing ‘in-tray’.
Some random papers might be left in the ‘active’ folder at the end of the month if there’s a delay dealing with them, and that’s okay. Just leave them where they are until they’re processed, then move them to the appropriate ‘month’ folder in the ring binder.
This system works for small business records or for household accounts. It provides the paper evidence for the transactions noted elsewhere in accounting or bookkeeping software packages.
If you have many different types of records and want to separate them down further, feel free to add additional, labelled folders for each category you’re tracking.
Write on Receipts
As soon as you get a receipt, a bill or an invoice you need to keep track of, write on it what it was for, how it was paid for, and the date. If any other actions were taken, such as phone calls or correspondence, make a note of that too with dates and the name of the person you wrote or spoke to. It’s also a good idea to note down whether you send a letter or an email. Keep copies of invoices you send out, and write on them when and how payment was received.
Writing the business purpose on receipts is especially important if you’re claiming expenses. A restaurant receipt, for instance, just says how much you spent on the meal, it won’t remind you why you were there or who you were entertaining.
Make Use of the Cloud
Online accounting packages can make bookkeeping much easier. For more advanced packages you’ll pay a monthly subscription, but they save time by automating mundane tasks.
You can, for instance, link your bank account so every transaction is automatically logged. Instead of manually entering everything, all you need do is explain each transaction. It also makes finding discrepancies between the balance in your accounts and the one actually in the bank, much easier. Invoices too, are quickly generated, and you can create templates, build price lists or track time on projects.
You may still need an accountant to help with filing your tax return, so ask him or her to advise you about their preferred method for keeping records. If you align your system with theirs, it will save you both money and expense at the end of the year.