How To Achieve Accurate Bookkeeping on A Budget
Maintaining accurate books will provide the business owner with more control, better business insights, increased cash flow and minimized taxes. Entrepreneurs often find it time consuming and challenging to understand the numbers, and new business owners with limited experience may consider bookkeeping to be a cost centre with little value.
Bookkeeping done right will bring value to the table quickly and cost effectively. Experienced bookkeepers can catch-up and clean-up the books very quickly with accurate, useful results. We are cost effective because we do it so quickly, while avoiding costly pitfalls and optimizing cashflow to support faster business growth.
To make your monthly bookkeeping accurate and affordable consider the following tips from Freestone Associates.
Post business transactions
Ensure you are capturing ALL your business transactions comprehensively and accurately, including all bank account(s), credit card(s), merchants (Amazon, Shopify, Stripe, PayPal, Order Space, etc.). Find and train the right person on your team to post the data. In a small business, the best person to post the data will be the person who knows the data intricately. QuickBooks online makes posting data very quick, but accuracy of categorization and tax coding is crucial.
Reconcile each account
Reconcile each account carefully to ensure no data duplication, data gaps or errors. Merchants can and do make mistakes. QuickBooks Online makes reconciling so much faster but you still need to review and identify potential issues and fix those issues quickly. It can be costly to find out 3 months later that important transactions did not happen as expected.
Collect accounts receivable
Follow up with customers quickly. Implement tactics to minimize receivables and avoid collections that take more than 30 days. Training an eager learner to post the transactions routinely and stay on top of receivables will go a long way toward optimal cashflow.
Accounts payables and better vendor management
Ensure the posting of vendor bills and payments is done accurately and with no duplication. Vendors can make mistakes when billing customers, you want to ensure you can catch and resolve those errors quickly. Ensure the categorization and tax coding is consistent and accurate so you can have confidence in the management reports. The correct tax coding will minimize sales tax due to the CRA and save enormous amounts of time, stress, and money when an audit happens.
Ensure you report and file your payroll taxes, sales tax (GST/HST) and corporate tax on time to avoid needless penalties and interest. Before filing, adjust the books legally for unearned sales and bad debt so you will not end up paying the CRA taxes for money you haven’t earned and may never receive.
Hire a professional
To save money, hire a professional bookkeeper to create a customized setup. A bookkeeper with depth of experience will set up the system quickly and properly, will then train your staff to post the transactions correctly and follow up with oversight. When the bookkeeping system is setup right, you get successful results and fast business growth.
If you need any help with bookkeeping for your business, email us at Kim@FreestoneAssociates.ca. At Freestone Associates, we specialize in bookkeeping for small businesses, including not-for-profits and corporations. We also offer accounting software setup, QuickBooks training, and support. We serve clients across Etobicoke, Toronto, Mississauga, and the surrounding areas.
For more details about our professional bookkeeping services in Toronto, Ontario, get in touch with us by clicking here.