Best practices for Bookkeeping in a company

BookkeepingBookkeeping is one of the most important financial processes when you run your business. It is a job for the specialists. Yet, as a business owner, there are best practices that you must commit to following as a matter of good financial policy. Many businesses fold up due to poor financial management. And the business owners must follow sound business policies to keep their business healthy. Let us look at some bookkeeping best practices that will benefit all businesses:

  1. Get your bookkeeping done in a timely manner by professionals. You may have a small workforce of hired professionals to handle the bookkeeping and accounting tasks in-house. Make sure they follow the correct processes consistently.
  2. As the scale of business increases, take a call if the bookkeeping tasks can be adequately handled by your original workforce. The work must not suffer hence options like outsourcing can be considered especially if the choice of taking on additional hands seems very expensive and cumbersome. Remember financial tasks are not the core competencies of your business.
  3. Choose efficient bookkeepers who are aware of the right processes. This will ensure that you do not lose money that could have been saved had the right opportunities been utilized.
  4. Educate yourself so that you are familiar with basic accounting cycle, procedures and financial statements. This will help you in assessing the financial health of your business regularly and in gauging if your bookkeeping and accounting team are doing their job well. You need to familiarize yourself with the basics like Accounts receivable, Accounts payable, customer balances and financial reports.
  5. Have a working knowledge of the accounting software programs that are most commonly used in your business.
  6. It is best to outsource payroll and payroll reporting and taxes to a payroll service provider who can handle the federal reporting correctly.
  7. Always maintain separate business and personal bank accounts as well as assets. It is important from the accounting viewpoint.
  8. Do not hesitate to approach your accountant and lawyer in financial matters as and when the need arises.
  9. Ensure that the money held back for specific purposes like sales tax or mortgage payments is utilized for the same purpose.
  10. Ensure that your bookkeepers reconcile your bank accounts every month. Bookkeeping tasks must not be procrastinated.
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