9 Bookkeeping Basics
Whether you complete your bookkeeping yourself or you have a bookkeeper, there are certain tasks that need to be done on a regular basis - consider these the basics of bookkeeping. This can act as your everyday bookkeeping checklist.
Maintain accurate records.
Stay on top of your financial transactions, record them, and triple-check for accuracy. Keep up with your books. Accuracy saves yourself from a mess later.
Handle day-to-day management of accounts.
Whatever needs to be done on the day-to-day, it’s up to you to complete efficiently and accurately (or your bookkeeper). Looking at your accounts all day will help you have a better grasp of the financial-aspect of your business.
Ensure you remain compliant.
Make sure your business is following all regulations and guidelines when it comes to your industry. Remain informed on any new rules to be implemented or adjustments to current ones.
This is something to do on a weekly or monthly basis. Double-check your records with your bank account(s) to make sure they match. If they don’t, it’s time to do some digging to uncover what was missed or entered incorrectly.
Manage Accounts Payable.
Make sure you are paying bills on time. A/P is money your company owes to another for their goods/services that you have already received. On your Balance Sheet, these are listed as liabilities because it’s debt your company owes.
Manage Accounts Receivable.
Stay on top of the money owed to your business from clients/customers for goods/services they purchased from you in the past. On your Balance Sheet, these are listed as assets because they add value to your company (in the form of future cash).
Prepare financial statements.
There’s the Profit & Loss Statement, the Cash Flow Statement, and the Balance Sheet. These need to be prepared and reviewed regularly. If your books are not up-to-date or completed accurately, these reports will be futile.
Pay your people! Ensure there is enough money in the company’s account and then process payroll so your team can be paid. You also need to accurately add employees to payroll so they are paid correctly based on if they are salary, hourly, or contract.
Manage cash flow.
Make sure you have enough money in your account and never run too low! Look at your cash flow on a daily basis. You need to know where you stand financially at all times when it comes to your business.
Keeping up with your bookkeeping is no easy feat - there are many intertwined pieces that all need to be up-to-date and accurate for the rest to follow suite. Leave your bookkeeping to a professional if you don’t have the time to maintain and manage your finances - your bookkeeping should not be neglected.