Your bookkeeping is only as good as the information you put into it.
We’ve said it before and we’ll say it again: the outcome correlates directly to the quality of input.
Professional and compliant set-up, cleanup, and bookkeeping maintenance are so important!
There are 3 general steps to achieve this:
1 – Set-up bookkeeping correctly the first time
2 – Clean-up bookkeeping when it falls behind
3 – Maintain bookkeeping regularly
Step 1: Set-up bookkeeping correctly the first time. It is critical that your bookkeeping is properly set-up in your preferred accounting program from the very beginning.
But it doesn’t always happen that way.
Most business owners aren’t trained accountants and yet they often setup their bookkeeping themselves in an effort to cut costs. They don’t realize that it will cost them more in the long run.
It’s imperative that accounts payable and receivable are set up right, including customer and vendor lists.
The Chart of Accounts must be established, classes and other categories may need to be designated, invoices must be formatted, inventory catalogs properly created, commissions structures setup, employees and payroll input correctly, and so much more needs to be done right.
The professionals at Sherman Oaks Accounting & Bookkeeping powered by One Source Services are old pros at setting up bookkeeping in QuickBooks.
Every company has different business specifications and requirements; we have solutions that perfectly customize bookkeeping for each client.
It’s worth repeating: Do it right the first time and you will save yourself a lot of time, money, and anxiety down the road.
Plus, don’t forget that the higher the quality of input information is, the more meaningful the financial statements will be to base your decisions on.
Step 2: Cleanup bookkeeping when it falls behind. Let’s say that your bookkeeping was not setup properly in the beginning, or perhaps it fell behind since then.
There will be some cleaning-up to do!
That’s where step 2 comes in: cleaning-up bookkeeping.
Sherman Oaks Accounting & Bookkeeping powered by One Source Services does bookkeeping cleanup literally every day.
We bring bank transactions current, make account balance adjustments if needed, and then reconcile accounts against actual statements to double-check our work.
We enter bills and payments to make sure the accounts payable are correctly represented.
We obtain vendor statements and reconcile them with accounts payable before matching the balances.
We link customer payments to invoices and follow-up on aging reports so that accounts receivable is current.
We even offer invoicing and collections services to bring accounts up-to-date when they’ve been neglected.
We often review the Chart of Accounts and make adjustments to ensure compliance and reduce tax liability.
These are just a few of the many ways that we can cleanup the books and improve data input quality!
Step 3: Maintain bookkeeping regularly. Step 3 ensures that bookkeeping stays on track and compliant, following governmental rules and regulations, and protects you from penalties or fees in the event of late payments, overdrafts, or even a tax audit.
If your bookkeeping is not timely, complete, and accurate, then you probably don’t know how much income you generated, how much money you spent, or how much profit you had left over.
There is a lot of valuable information that can be interpreted from meaningful financial statements born out of good bookkeeping practices.
Hiring a professional to maintain bookkeeping, like Sherman Oaks Accounting & Bookkeeping powered by One Source Services, will maximize your tax deductions and reduce your tax liability.
An experienced bookkeeper will record transactions accurately, provide regular reports that analyze the combined effect of transactions over a period of time, and monitor overall business health.
Do you know exactly how much you have in your bank account today? Your bookkeeper would.
How close to budget are you currently? A designated bookkeeper could tell you.
What is the average customer aging for invoice payments? They would know that, too.
How did sales perform this month over the same month last year? If your books were setup property and have been responsibly maintained, you could easily look up the data.
There is no replacement for a good bookkeeper. Proper setup and maintenance will avoid the need for cleanup. And when the need arises, hiring a professional to clean and catch up the books will save time and money in the end.
As our owner, Anna, often says, “If you think it is expensive to hire a professional, hire an amateur!”