Bookkeeping Tips for the Small Business Owner

DanielDB By DanielDB, 27th Jan 2011 | Follow this author | RSS Feed | Short URL http://nut.bz/tr764x86/
Posted in Wikinut>Business>Accounting & Finance

Each and every business, whether big or small or even the smallest sole-owned business, must have a bookkeeping system in place. Nobody can avoid or escape this additional burden on them. But it is not a burden; it is a necessity!

Bookkeeping tips

The bigger businesses either opt for outsourcing to Bookkeeping Firms or even Accounting Firms or they have their own on-site bookkeeping departments. However, not all businesses, especially the small or sole-owned businesses can always afford such luxuries and therefore they do it themselves. But then it is vital that they know how the system works.

It is also a known fact that some small businesses have failed totally or partially because their bookkeeping system was too complicated that the proprietor could not really comprehend or master it.

Here are some tips to avoid the pitfalls of self-bookkeeping:

1. Always do weekly balances. Do not wait for month-end to do it. This is the easy way to detect errors and mistakes you could have made.

2. Discipline yourself to do your monthly books immediately on receipt of your bank statement. And do not wait for the postal services to delivery it. It is good practice to arrange at your bank for collection on a specific date of the month.

3. With the bank statement as source document; tick-off cheques and deposit stubs against the transactions listed to identify any cheques not yet cashed or deposits not yet shown.

4. It is to your benefit and it is also not that expensive to also utilise Internet Banking services as provided by your Bank. With this you can do daily checking and controlling with the result that when you bank statement arrives you are more than 75% through the exercise.

5. When you are out by a specific amount during balancing first check for an entry of the same amount that might be in the wrong column or account or then miscounted.

6. Only income and expenditure that are wholly and exclusively for your business may be included in your bookkeeping system. This means that your private finances must be separated from the finances of your business.

7. Keep your bookkeeping system up to date. Do not postpone doing it. Do it like clockwork.

Remember, your bookkeeping system is not only there to comply with the requirements of tax regulations or prescriptions of financing houses; it is also there to enable and assist you to have a tight control over your business’s finances!

Tags

Bookkeeper, Bookkeeping, Business Management, Financial Control, Financial Plans

Meet the author

author avatar DanielDB
I was born in 1954. After finishing high School I obtained a Bachelor’s degree with history and International Politics as majors.

After graduation I joined the Public Service and served for more than

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