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Are your books a mess?

When your books are a mess!

I have been working hard this week ensuring all my financial information for my practices are up to date and everything is in order.  It is an important step each year that I go through and I recommend we all stop at this time of year and review our accounting practices!  Are you efficient in your use of bookkeeping time?  Are you checking to ensure your financial data is in order? Do you have a financial mess?!

Here are my five tips to ensure your books are not in a mess this year…

1. Chart of accounts: This is a list of all the accounts that you are using to ‘categorise’ your payments and revenue.  The great thing about a chart of accounts is you can add additional ones that reflect your business and change the names so they make greater sense to you.  For example, some of the account names that I use are ‘services rendered’, ‘therapy supplies’, and ‘maintenance/repairs’ – I have created these myself as they match the work that I do and make sense to my admin team as well.  One of the important steps here, is if you have any employees who also have access to your bookkeeping, that they also know which accounts are the right ones to use for each transaction. 

2. Tidy up your contacts/supplier list: sometimes it can be easy to find a double or triple up of the same supplier or the same contact in your accounting software as the year progresses.  I like to check these at the end of the year and merge any duplicates to tidy things up.  If there are any old ones that I don’t use anymore, I often archive these.

3. Ensure your transactions are in the right accounts: sometimes, it can be easy to accidently classify a transaction to an account that you don’t think best reflects where it should be, for example, on the weekend I found a transaction in ‘marketing’ that was really a ‘professional development’ transaction, so I changed it over.  Checking each month that things are classified in the correct account can make it easier at the end of the year.  I spend yesterday ensuring that I was happy that each account in my ‘chart of accounts’ didn’t have any ‘outliers’ (transactions that shouldn’t be there and belonged elsewhere).  If you have someone else partake in the entering of transactions, that it is essential that you check this regularly to make sure expenses and income land in the categories you need.

4. Add documents as you go: scanning or attaching photo image of a receipt or invoice to your accounts as you go is a great way to keep things in order and reduce your paper trail.  I use Receipt bank for this task – just scan and upload my receipts, and Receipt Bank will transmit them across to Xero in a jiffy – so easy and saves me so much time!

5. Check often: Check the bank statement at the end of each month actually matches the balance of that account in your accounting software – it may still be out, even if you have reconciled all your transactions – so make a little diary reminder each month to check this and if there any discrepancies, it is easier to fix these for that month in question, that try to find the issue at the end of the financial year.

Happy bookkeeping!

Read 1589 times Last modified on Monday, 18 July 2016 21:39