For reasons beyond satisfying your accountant and Uncle Sam each year it’s important to keep up with your bookkeeping so you can assess your income and expenses – really, how do you know if you are making money or spending too much on office supplies unless you have up-to-date, real time info?
Below is what I consider to be the most super-duper important things you can do that will eliminate some of the frustration you may associate with handling your bookkeeping.
- Perform your bookkeeping daily
- Don’t go overboard with your Chart of Accounts – the more detailed it is the more time and consideration it will take to decide what account to use
- Have a filing system that is easy to use and access (make sure to retain records for the required number of years – IRS info here)
- Reconcile your bank statements upon receipt
- If you use QuickBooks enter your credit cards into QuickBooks and also reconcile them
- If you use PayPal or Google Checkout frequently also add them as a bank account in QuickBooks for easier reconciliation
- Don’t co-mingle personal and business funds
- Buy “checkbook” sized tax organizer such as this one – keep it in handy and update it immediately with mileage, entertainment, etc. (Use code “yva” on any purchase at the site to save 10% on your order)
- Make sure you send out 1099-MISC statements by IRS deadline to all service providers you pay $600 or more each year
- If you really hate it, outsource it to someone (like me) who enjoys it!
What else do you think belongs on this list? Feel free to add your comments and suggestions for other people!
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{ 2 comments… read them below or add one }
This is really what many entrepreneurs forgot,to record even small expenses to know where the fat is and be able to cut it out in overheads. Thanks a lot for reminding us, great tips indeed!
jean@small business bookkeeping´s last blog ..Jan 7, Becoming a Bookkeeper
Jean – oh my gosh it is so important. Even on the vacation rental that I own I realized I spent way too much money on bottled water and it was a piece of “fat” I could cut without consequence or really affecting my rentals. I am ultra-detail oriented and have a crazy long chart of accounts but in my case I can handle it because I’m a bookkeeping person.