Bookkeeping tips

Entrepreneurs keep a lot of the financial details of their business in their heads. Doing so has its advantages: No new software to learn, no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk.

But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits. It can also help you to stay out of trouble with the Internal Revenue Service.

1. Plan for major expenses.
You're less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable.

2. Track expenses.
You otherwise might some miss tax write-offs and may lose out on others.

3. Record deposits correctly.
You may be less likely to pay taxes on money that isn't income.

4. Set aside money for paying taxes.
The IRS can levy penalties and interest for not filing quarterly tax returns on time.

5. Keep a close eye on your invoices.
Late and unpaid bills hurt your cash flow.

Some entrepreneurs believe that once they've sent out an invoice, they've taken care of billing. Not so, Every late payment is an interest-free loan and hurts your cash flow.

Courtesy of Entrepreneurs

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Basic Bookkeeping tips

For many small businesses, the most common bookkeeping errors are also the easiest to fix. Use these six tips to help keep your business on sound financial footing.

1. Use the right accounting system. Most businesses use either cash-based or accrual-based accounting. If you use the cash method, you count income when you receive it and expenses when you pay them. Under the accrual method, you count income and expenses when they happen, not when you actually receive or pay them.

2. Maintain daily records. This is one of the most basic rules: If you don't keep accurate daily records, you don't have an accurate way to track the financial condition of your business. Different people use different record-keeping systems; what matters is that you have one and use it every day. Once you have a good system set up, accurate record keeping will take just a few minutes a day.

3. Handle and review checks carefully. It's easy to be on autopilot when you're writing checks and tossing canceled ones into a filing cabinet without reviewing them. Remember: Those checks are as good as cash. And if something goes wrong, you — not the bank — will be on the hook. Take the same care with checks as you would with cash. Sign checks using a clear, distinctive signature that won't invite forgery.

4. Get a bank statement with a month-end cutoff. This is another basic tip that can reap big rewards. Synchronizing your bank statement with other monthly records will make it much easier to reconcile your statement and track expenses.

5. Leave an audit trail. Your record keeping will be much more effective if you have a system that allows you to quickly and easily retrace your company's financial activities. This means keeping your invoices and checks in numeric order, not skipping check or invoice numbers, and keeping separate bank accounts for your business and personal funds.

6. Use a computer. Computer bookkeeping software is absolutely essential for all but the smallest businesses. These applications make it easy to track income and expenses, prepare tax documents, summarize your company's financial activities and back up records for safekeeping.

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Bookkeepers and accountants are not the same

Accountants and bookkeepers have different jobs and responsibilities.

An accountant’s main focus is:

• the preparation and lodgment of statutory returns
• advising on legal entity structures
• giving general business and financial advice.

Accountants are usually members of a statutory association. Qualified and registered accountants might call themselves CPAs (Certified Public Accountants), CAs (Chartered Accountants) or other titles, depending on the country they're working in.

Bookkeepers can manage lots of different responsibilities within a small business. But the main focus is the organization, recording and reporting of financial transactions as part of the operational life of a small business. In more recent times, some bookkeepers have extended their range of duties to include:

• training clients to use accounting software
• implementation of document management and inventory control processes to create efficiencies within the business
• implementation of POS (point of sale) systems that capture the daily transactions in a retail environment.
• Develop, implement maintain and review internal business processes.
• 
  
• Keeping track of daily transactions
• Sending out invoices and managing the accounts receivable ledger
• Handling the accounts payable ledger
• Keeping an eye on cashflow
• Preparing the books for the accountant

It's the bookkeeper who does the day-to-day work so that the accountant can concentrate on strategic financial operations.

Courtesy of Xero

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Five bookkeeping tips for entrepreneurs

Entrepreneurs keep a lot of the financial details of their business in their heads.
But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits.

1. Plan for major expenses.
You're less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable.
2. Track expenses.
You otherwise might some miss tax write-offs and may lose out on others.
3. Record deposits correctly.
You may be less likely to pay taxes on money that isn't income.
4. Set aside money for paying taxes.
The IRS can levy penalties and interest for not filing quarterly tax returns on time.
5. Keep a close eye on your invoices.
Late and unpaid bills hurt your cash flow. Assign someone in your organizations to track your billing.

Courtesy of Entrepreneur

For more information contact Neikirk, Mahoney and Smith at 502-896-2999