Accounting Tip 1 - The world has become a dangerous place due to check fraud, so make sure to establish boundaries between yourself and your bank. Create monetary limits for checks, Set-up a special account for paychecks and keep all other checks made out to business and not individuals. Keep your checks in a locked, secure location.
Accounting Tip 2 - It is important to keep up-to-date records on all of your financial activities. This includes, paying bills, payroll, expenses, and profits. These records will be needed at tax time and it helps immensely if they are already current.
Accounting Tip 3 - Make sure to check your billing statements. Be on the lookout for any extra or hidden charges as unnoticed they can add up to a big expense quickly. Insure that you are only billed for the services / goods that you have received.
Accounting Tip 4 - Also, while looking at your statements or invoices, it's a great time to review the expense of doing business. If you appear to be spending too much money in one area, you may wish to find a cheaper, more cost effective alternative.
Accounting Tip 5 - If you find yourself too busy to balance your own financial records, then you may want to hire someone else to keep track of your transactions. You don't have to hire someone full-time as there are accountants who will work part-time at an hourly wage. This will help you stay on top of your financials while still be able to focus on your business.
Accounting Tip 6 - Begin to set purchasing limits within your own company. Require approval for purchases that exceed a certain set amount either by yourself or a manager / executive. Make sure that the purchase orders / expense reports are complete and detailed with notes as to the importance of the expenditure.
Accounting Tip 7 - Keep an eye on any outstanding balances. If you notice that they are piling up, you may want to institute sterner collection policies. Make sure that your payment procedures are written on every invoice sent and should be reviewed with the client beforehand. Normal time to allow a payment to be received is 15 to 30 days after the receipt of the goods or services. Failure for your clients to pay on time can cause huge problems with running an effective business as they are sitting on your capital.
Accounting Tip 8 - The rules regarding taxes change every year so it's a good habit to stay on top of the new IRS policies. Take a class every year or read some literature so you can make yourself aware of the accounting rules.
