Tracking your company’s finances helps you stay on top of cash flow and make smart financial decisions, and setting up strong financial controls aids this process. Financial controls are best practices and policies you put into place so that you have a clear paper or digital trail that shows you exactly how much money your business spends and how much it earns.
Store Receipts and Financial Records
Keeping all your receipts, invoices, and finance-related documents serves as an example of a financial control. Those documents let you track what you spend and earn, and you can look back at them if you need more information about specific transactions. Plus, you need to keep financial documents to satisfy Canada Revenue Agency (CRA) requirements. Make this financial control effective by having an organized storage system. Expense tracking apps often let you scan receipts to store digital copies, which saves physical space in your office. When you need to keep paper copies of financial documents, storing those items in a filing cabinet with individual file folders keeps everything organized. Labels make it easier to find what you need.
Create Separate Bank Accounts
If you don’t already keep your business and personal finances separate, you should. With independent accounts, you can more accurately track your income and expenses, and you can take it even further by setting up multiple commercial bank accounts for different purposes. For example, you could use one account for deposits, one for expenses, and one for taxes. This separation lets you know exactly how much your business spends and earns in any given time period. Having one account just for deposits lets you transfer money to other accounts to make sure you have the money for those expenses.
Use Cloud-Based Accounting
Cloud-based accounting software, such as QuickBooks Online, offers another effective financial control. You can customize the software to process all your transactions, pay your employees and vendors, and send invoices to your clients and customers. When you conduct your internal audits, accounting software lets you easily generate the financial reports you need to discover your business’s health with the click of a few buttons. Also, since you keep everything in one spot, you can easily look up the data you need to keep a close eye on your business finances. QuickBooks integrates with numerous apps for expense tracking, receipt scanning, mileage tracking, payroll, inventory management, and various business-related functions. That integration automates some of the process of transferring financial data to your bookkeeping records.
Set Accounting Policies and Procedures
Standard policies, procedures, and methods of handling your bookkeeping and accounting create consistency with less room for error. If you have an accounting background, you have the knowledge base to put the necessary policies and procedures in place for keeping track of your business’s money. If you have an established small business that generates a significant amount of revenue, you may need to contract the services of an independent accounting professional to help you develop the financial controls you need to stay on track financially. A professional accountant can help you create procedures and systems that make the accounting process easier.
When you run a business, you need to keep track of the money. Financial controls can help you stay organized and in compliance with CRA regulations as your business grows. Keep your books accurate and up to date automatically with QuickBooks Online. Change the way you manage your finances now.