ACCOUNTING TIPS

Accounting Tips 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 Tips 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 Tips 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 Tips 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 Tips 5 - If you find yourself too busy to balance your own financial records, they 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 Tips 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 Tips 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 Tips 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.

Accounting Tips 9 - You need to secure your own future and since its your business you need to take some of your profits and invest them into a retirement fund. Your own 401K so to speak. If you do not start your own retirement fund no one else will for you. It is recommended that 10% of your profits be placed in your fund.

Accounting Tips 10 - Don't get carried away when creating your financial accounting system. Keep it simple and easy for you to use and understand. The more complex the system, the more chance mistakes can be made. Create a modus operandi for handling your financials and sticks to it. Create lists for monthly and weekly scheduled tasks concerning and paying bills.

Accounting Tips 11 - Whether or not to use accounting software is a very important decision. Accounting software can save you time over doing everything manually and usually has good tools to run sales reports that could hours to do by hand. Using software also cuts down on the redundancy of having to rewrite customer or vendor information on separate forms as they program will often store the information in a database that you can then retrieve at any time. If you are running your business yourself without any help and only a small customer base, then you may not need a software program or could use a free or low-cost option. However, if you have employees, a good sized inventory, and/or many customers, then using software will help you run more efficiently and more accurately.