Consistent, accurate bookkeeping is critical to the success of any business. Besides saving money in taxes and helping to prevent audits, precise and organized bookkeeping helps you make better business decisions with less frustration. You never know when you’re going to need to reference your records. Having your books in order makes it much easier to get what you need quickly. Accurate bookkeeping also helps you spot potential issues early and helps you avoid penalties or legal issues. Making a few easy changes can help increase accuracy and keep your books tidy.
Avoid Common Accounting Mistakes
Many problems associated with bookkeeping are entirely avoidable. For example, reporting your taxes accurately to the Canada Revenue Agency helps you avoid issues, such as an audit or fines. Filing those reports to the CRA in a timely manner helps you avoid significant amounts of interest or other monetary penalties. Accurate, efficient bookkeeping practices can help you stay on top of your company’s requirements and deadlines to make it easier to file. You can avoid common bookkeeping mistakes by putting standard processes in place with checklists to keep you on track.
Use Accounting Software
Most businesses these days aren’t keeping physical books, although having hard copy backups is never a bad idea. Computers and bookkeeping software make it easier to keep accurate, organized records. Programs such as QuickBooks Online handle the calculations for you and make it easy to automate a lot of the accounting process. That makes the process faster and reduces the potential for human error, which can throw off your books. You can also use many different apps for activities such as payroll, inventory management and CRM to streamline your business and transfer data seamlessly.
Use a System of Checks and Balances
Ideally, you should be able to trust the employees who have access to your records. At the same time, you can never be too careful. A system of checks and balances prevents one person from being able to access or change the entire system without someone else noticing. Messy bookkeeping doesn’t always mean fraud, but when fraud exists, it’s usually hidden by messy bookkeeping. Keeping your records neat drastically reduces the chances of fraud, and adding a system of checks and balances provides that extra level of security that lets you sleep well at night.
Be Consistent with Bookkeeping
Implementing strict bookkeeping standards and processes helps you keep your books accurate and consistent to cut down on potential errors. The best approach is to be meticulous and stay that way. That consistency helps you reduce the risk for human error that can throw off your books. Once you get in the habit of following a set of standard, accurate procedures, it becomes easier to do it right every time. Having those standard procedures also helps you cross-train other employees to help out with the accounting. That way you have other employees who can handle the duties if you or the person who normally handles accounting is absent from work or resigns.
Once you start following strict procedures, you find that attentive record keeping isn’t as difficult as you initially thought. Put the proper guidelines in place and they become second nature. Keep your books accurate and up to date automatically. Change the way you manage your finances now.