10 WAYS TO ORGANIZE YOUR BOOKS
I’ve decided to help make your life easier. You might ask how? Let me tell you. Having managed the books for several small businesses, I’ve come across some interesting situations in which clients presented their data to me. Everyone has their own technique, but I noticed the biggest challenge across the board was consistency. So I ask you, what are the best methods for organizing your data? Below, I’ve hi-lighted 10 of the most popular methods to present complete and organized documents for bookkeeping.
- Create an operations manual which clearly states your method of file maintenance. Make sure that all key personnel have a copy.
- Keep a receipt for everything. Every transaction should have a corresponding document. That includes all transactions no matter what the originating source is (i.e. purchase orders, credit card receipts, bank deposit slips, etc.)
- Make sure that all documentation is properly labeled. All customer and vendor files should have complete contact information. The dollar amount of the transaction should be clearly stated on documents.
- Use a tickler file. You know the kind that has the sections either separated by date or letter of the alphabet. This helps to control the flow of papers daily.
- File, file, file. Don’t forget to properly file away all your documents. How often you do this, depends on the amount of activity you produce. Get into the habit of doing this at least weekly.
- File retention. Every industry has standards for what files to maintain and for how long. Check with your industry’s reporting requirements.
- Have a checks and balances system in place. Important transactions like writing checks or depositing funds should always be reviewed by a senior person of the company before completing.
- Important items like checks, deposit slips, signature stamps, should always be kept under lock and key. No more than 2 people should have complete access to these items.
- Color code your filing system. I’ve found this one to be really effective. It makes it easier to find items based on categories. For instance customer files could be green (for money), vendor files could be red (for payments). You get the picture.
- Use integrative software along with your major software for bookkeeping. For instance, there are plenty of file management packages for handling customers, employees, and the like. These packages help with setting up categories, creating profiles, and are generally compatible with spreadsheet and word processing programs like MS Office.
There we have it. Keep focused and stay organized.
Partnering for your success!
Jacqueline E. Ford
Financial Strategist
SMALL BUSINESS BOOKKEEPING-Why is it necessary?
Many small businesses today start out with such enthusiasm, innovative ideas, and the determination to become a success! I remember when I first started my business. I took a class in entrepreneurial basics, to learn the necessary tactics in being a successful business. One of the first concepts we learned was to build a team of professionals, that of course, included an accountant or bookkeeper. Well needless to say, the first response that the classroom had was, “but we can’t afford these services starting out”. So the next obvious solution was to either perform these services ourselves or postpone them all together until the necessary funds became available.
We must stop the madness now! As small business owners, we tend to look for shortcuts that eventually cost us in the long run. It makes better business sense to invest upfront in these important services, than to suffer the consequences of not doing so. Managing your “books” or financial documents, is essential in determining the financial status of your enterprise. Without it how else when you know when to pay the bills, or collect from customers, or even apply for that much needed loan to increase your working capital. Actually, creating a forecast of your financial blueprint in advance is key to the planning and developmental stages of your venture. Starting out organized is the best method, and sets the tone for the direction of your future operations. So let’s get busy. Hire the professional to outsource, or get the necessary training so that you can do it in house. Whatever your options dictate, DO IT NOW!
Partnering for your success!
Jacqueline Ford
Financial Strategist
What is Bookkeeping?
Welcome to this month’s discussion on small business bookkeeping. Over the next several weeks, I will post articles pertaining to bookkeeping theory & practice.
As a successful business owner, I know the daily challenges of running an organization, and what it takes to stay on top of issues affecting your industry. My goal here is to make this process easier for you. How, by passing on the knowledge and the experience I’ve gained over the years. I will provide weekly issues that cover various topics ranging from creating an effective system, managing your books, to gaining valuable information on how to manage your books better. So let’s get started, okay.
WHAT IS BOOKKEEPING
The best place for me is always at the beginning. So our premier topic is “What is bookkeeping?” For most people, we tend to be very challenged when dealing with our own finances, let alone, our company’s finances. But in reality, we all are, on some level, financial strategist, whether we’re good at it or not. So think for a moment, on a daily basis, we are counting our money, determining how much we have, and figuring out where to spend it. There you have it in a nutshell! The whole process of keeping track of our financial picture boils down to basic bookkeeping. So, to give it to you in a more formal definition, bookkeeping is “the process by which you record transactions in order to monitor an entity’s financial position”.
IT’S EASIER THAN IT LOOKS
Believe me when I say, “it’s easier than it looks”. Simply keeping track of how much money you bring in versus how much money you spend, and what you spend it on, is the foundation of bookkeeping. When you are balancing your checkbook, paying your bills, making decisions about borrowing money, considering whether you need additional income; all this activity is involved in bookkeeping. Of course, most companies have a more formalized system, but I think you get the gist of it here. There are so many processes that exist to create an effective bookkeeping system. The goal is to choose a system that benefits your method of operations.
NO MORE DRAMA
Fear comes from the unknown. Imagine being able to make key financial decisions because you are confident in knowing what resources you have available to you. Having a well defined, structured process of bookkeeping will not only give you peace of mind, but it also allows you the freedom to be able to focus on other important business issues. Remember, success comes from being organized and prepared. Let’s minimize those surprises and prepare for success.