Successful businesses are known to follow certain practices for bookkeeping. If you intend to be successful, it is recommended that you do the following practices annually.
- Set up a chart of accounts that best keeps track of all your bookkeeping information.
Worksheets, income statements, balance sheets and everything else that goes into bookkeeping is defined by the chart of accounts. Good ones are ones that track every account that is required for bookkeeping from cash to expenses.
- Balance and record daily sales and cash receipts daily.
To keep organized, balancing and recording daily sales and cash receipts must be done daily. This makes sure that all information is current and reliable.
- Reconcile your bank account.
There may be changes in the business’s bank account which are not recorded in its books. This is why bank reconciliation is important, it ascertains the differences between the business’s bank account and the business’s accounting records, and it makes sure that the business is aware of the changes to its bank account.
- Watch closely your accounts receivable from customers.
Follow up on your customers’ debts and make sure that you record each one. Good businesses know how to manage its accounts receivable. Great businesses monitor them closely like a hound on the hunt.
- Pay your bills accurately and on time.
For the purposes of keeping your books tidy and orderly you must pay your bills accurately and on time. Not only does this make you less likely to incur additional expenses but it keeps your books on track and organized.
- Set up sales and revenue targets and monitor your progress closely.
Businesses who wish to succeed are businesses with a goal. Success only comes to those who know what they want and work for what they want.
- Budget for all your expenses and compare your performance to budget regularly.
You should always know what to spend money on and how much you’ll spend. Your budgeting dictates a major part of how good your business will perform. It is also important to compare your performance to the budget spent. This allows you to gauge how efficient the budgeting and the business operations are.
- Watch for unusual changes in sales or expenses.
Unusual spikes or shifts in sales or expenses should always monitor. Discovering the sources of such changes may lead to game-changing opportunities for the business.
- Monitor your gross profit closely and make any necessary pricing or purchasing decisions.
Your gross profit serves as a semi-accurate indicator of the business’s performance. Learn to gauge changes in your gross profit and make all the necessary pricing or purchasing decisions.
- Take care of slow moving inventory.
Slow moving inventory may cause trouble for bookkeepers. They can cause confusion during bookkeeping as they might arrive unexpected. Learn to cope with unexpected situations as this will make you a better bookkeeper and a better businessman.
- Take physical counts of your inventory and compare to your bookkeeping records.
Keep track of your inventory by counting them physically then compare them to your accounting records. This will make sure that your accounting records are accurate and up-to-date.