How to Get Back in Control of your Bookkeeping   by Jeri Wilson

in Finance / Accounting    (submitted 2010-03-15)

No matter who you are, what you do or where you live, bookkeeping is an essential task for everyone - you need to know where your money is going and where it is coming from. If you can get it under control, imagine the free time that you will have to work on your business or spend with your family and friends!
When was the last time you felt overwhelmed about the state of your paperwork? Or the last time that you got frustrated with your bookkeeping not being what you know it could be? An effective bookkeeping system can free up hours of your time to spend doing what you really enjoy and reduce the stress you get from not understanding how your business is going.
Step #1: Get the stuff
1 x Lever Arch File with White 10 Tab Dividers
Mark the following tabs (as required):
* Bank
* Credit Card
* ATO/Accountant
* Financial Reports
* Payroll
* Superannuation
* Petty Cash
* Merchant Statements
* Customer Invoices
* Correspondence
1 x Expanding File (with the same tabs as marked above)
1 x Lever Arch File with A-Z Dividers (for paid supplier invoices)
A must for a fun and motivating bookkeeping filing system is colourful but
professional organising materials.
Step #2: Get your accounting software setup for your business or
home
The BIGGEST problem I see in small businesses is accounting software that has not been setup properly. Transactions have been entered and reports can be generated but they don't mean anything to the business owner.
If your accounting software has been setup with the correct categories for both your business' needs and your accountant's needs, correct tax codes for your tax reporting and areas that you don't need to use have been disabled - then there is not much that you can do wrong.
If you don't have an accounting software package, there are a huge number of cost effective packages - both for your computer or online.
Step#3: Get organised
I know you are saying "yeah right!" not being organised is what got me into this mess in the first place! All I can say is remember that every success is a series of small victories.
The only way you are going to take control is to enter your transactions into your software and reconcile the accounts. Bank Reconciliation is the process of checking that every transaction on your bank statement or credit card statement is in the accounting software.
Sort your paper work into two sections:
1. Transactions not yet processed in the software - file these into the expanding file
2. Transactions already processed in the software - file these into the lever arch file
As you process the information into the software program, file it straight away into the lever arch file. Finalise the lever arch files at financial year end and start a new one each financial year. Give your past financial year folder to your accountant with a copy of your reconciled software data file for easy preparation of your tax return.
Step #4. Get the basics
Have a qualified bookkeeper teach you the basics of how to use your program and check you have set it up correctly. Their review of your file on a periodic basis (e.g. monthly, quarterly, or when you need it) can save you money in accounting fees, improve your skills and give you confidence in the financial information that you generate and utilise to make important business decisions.
Step #5. Get motivated
Get stuck in and do it because the longer you leave something the worse it is going to get. Recognise that if you run a business you can not ignore its financial management - you started a business to make money right? Well when are you going to start managing it the best you can?
If your business gets too busy for you to handle the bookkeeping or you don't want to do your bookkeeping anymore, instead of having abookkeeper come to your already busy home office, simply send your offsite bookkeeper the expanding file of unprocessed information and they will process it, file it and send you back financial reports, payslips, BAS forms...the list goes on!
Make the choice this financial year to take the stress out of your
bookkeeping!