Keeping your accounting organised must be an attainable objective when running a business. However, the lack of discipline can sometimes result in problems later. So instead of getting into trouble in the future, here are some tips that can help you keep your accounting in order.
1. Separate your bank accounts.
You are courting disaster when you mix up corporate and private transactions in your bank accounts. Separate corporate bank accounts for your business transactions at all times, and keep your private bank accounts strictly for private transactions. It doesn’t cost much to open and maintain business bank accounts these days, so there’s no reason for you not to have one or more. Practice making frequent transfers of drawings from your corporate account to your private account.
2. Don’t use cash, if possible.
Avoid using cash for business transactions. In case you use it for an emergency, repay yourself with an appropriate expense claim, which evaluates the spending between spending categories. In this way, every business transactions are logged and the GST is securely captured.
3. Pay your credit card bills.
It is fine to use a credit card for your business, but pay your business credit card bills from your business bank account at all times. This would help you to easily track all business transactions and capture all GST. In the same manner, if you utilise the incorrect Eftpos card by error (like the one for your personal bank account), pay yourself utilising the correct expense claim.
4. Put a system for accounts receivable in place.
Implement a process for tracking whether your accounts receivable have been paid by your customers, clients or patients.
Similarly, record how long the accounts receivable have been left unpaid so you can ask for payment immediately. Your process must also log any special plans to pay over time or the reasons given for not paying. It need not be refined – it will be handled by your accounting software. If you are not utilising invoicing or accounting software to send invoices out, just note on the front of the invoice whether it has been paid or not, recording separately those that have been paid or those that are unpaid. You’d be surprised by how many business owners are not aware of who is indebted to them, which is crazy if you think how difficult it is to make money in the first place.
5. And don’t ignore accounts payable.
Likewise, put a process in place for your accounts payable. It is important to keep your accounts payable in order and pay your suppliers, etc. on the 20th of each month so that they are aware of when they are going to receive payment and you are aware when you are sending payment to them. According to study, the most successful enterprises are never late paying their bills.
6. Keep your paperwork in order and go digital where possible.
All your business paperwork should be kept in an organised manner. These days you can scan documents and store them electronically, either on your accounting software or in a basic electronic filing system utilising the date system so that all things are filed chronologically. Organise them in a separate e-folder for every month and year. If you are hesitant to adopt modern ways, you can store them in physical form. However, almost everything today is sent out digitally that it’s not smart to keep printing them out, wasting ink and paper.
You save time and money, as well as make your business a success, by keeping your accounting in an orderly fashion. Maybe, the more important thing is that it should prevent you from getting stressed.
PJS Accountants offers a full range of services including accounting, taxation, business improvement, superannuation, business valuations, asset protection, succession planning and bookkeeping. We have over 30 years’ experience with local businesses in Capalaba, Cleveland and the Redlands. Our team will be at your disposal, ready for your call to assist you to stay in charge of all aspects of your business. For enquiries, contact PJS Accountants.