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Good Bookkeeping Practices

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Do you know what will help your business to run like a smooth working machine? Good bookkeeping practices. Good bookkeeping can help you avoid several payment issues and use your financial reserves efficiently to grow your business. Abandon these practices – and mistakes will fester, leaving you up the proverbial creek with lots of backlogs to clear.

The best approach to understand good bookkeeping practices is to categorize them into daily, weekly, monthly, and quarterly tasks. Daily tasks become habits as you repeat them often. They make up the basic chore of your daily workflow. But do not let yourself bogged down in the details compromising your preliminary obligation to run the business efficiently. That is why less frequent tasks grouped effectively are your opportunity to step back and have a holistic view of your business. Add these weekly, monthly, and quarterly tasks to your business calendar, including them as part of your business roadmap will help you make fully informed and timely decisions.   

Read on to categorize the tasks that can be handled on a daily, weekly, monthly, quarterly basis.

Daily Tasks

  1. Record every business transaction into your general ledger to generate a permanent financial history of your business. The general ledger demonstrates the accuracy of all business transactions and reveals discrepancies such as duplication or erroneous transactions. There are situations when an explanation of the company’s finances is called upon, daily recording will provide an internal and external audit trail.
  2. Timely invoice customers or clients as soon as the sale is executed or service is delivered to avoid any delays or missing any transaction.
  3. Appropriately record both your cash and electronic payments and receipts in the respective journal section at the end of each day. Daily deposit of cash will avoid any pilferage or error.
  4. Cash flow is an overly critical aspect for any business, hence run a daily cash flow report to stay well aware of daily operations. It will help you in making needed adjustments.
  5. Maintain a backup of your financial record using an advanced backup source.

Weekly Tasks

  1. Keep track of cashflows weekly as well. At every step, check your data entries and filing are complete, accurate, and up to date.
  2. Run your accounts receivable and accounts payable reports and ensure that all bills are timely paid to maintain the strong financial status and integrity supporting a strong credit rating.
  3. Receipts are crucial for the business as all the business activities operate through them and for them. The financial circle revolves around the receipt frequency of the business. Hence check for any overdue accounts receivable and send a reminder to the customers or client if necessary.

Monthly Tasks

  1. Schedule a monthly meeting with your bookkeeper and accountant for monthly financial review to keep track of the business’s financial health.
  2. Perform monthly closing of all ledgers, run a reconciliation report known as trial balance. This will help you ensure the balance of all debits and credits. Inquire into all the entries being posted to the correct sub-ledgers and there are no mistakes.
  3. Prepare monthly statements for all receipts and payments. Clear due payments on time and send reminder statements to overdue customers or clients.
  4. Refine your collection policies on regular basis to create alignment with your aged accounts receivable reports.  

Quarterly Tasks

  1. Coordinate with your tax advisor to prepare and file your quarterly taxes, required by the jurisdiction. Ensure to file all reports on time for sales tax, employee payroll taxes. Timely filing will avoid late penalties. Consulting with your tax advisor to understand if any changing regulations affect your business and how you can proactively deal with them.
  2. Meet with your accountant for a quarterly financial reflection of your business. This allows you to step back and understand the holistic business picture. Run the business reports produced through your business accounting firm or software, thoroughly study, discuss and make well-informed decisions on time if required.
  3. Maintain backups for all your financial data and ensure it is secure.

Your responsible attitude is reflected by all the stakeholders through continuous monitoring and refining of your business roadmap. A consistent eye on financial records helps to adapt and adjust quickly to any changes in the business world. Your year-end stress will be immensely released if your daily, weekly, monthly, and quarterly bookkeeping tasks are vigilantly taken care of. The stressful tax season will be exponentially easier for you if good bookkeeping is well-practiced. Proactive measures will undoubtedly reward you with time and money saved – but the real value of organized bookkeeping lies in the peace of mind. You are relieved from any unnecessary stress when you know that your business is on track and taking you exactly where you aim to reach.

We at Filing Taxes are here to help with bookkeeping and more. Our reliable bookkeeping services are designed to make your life easier so that you can focus on other crucial aspects of your business. Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step towards proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.

  • Create a separate business account
  • Understand business accounts
  • Determine your accounting method
  • Establish an accounting system
  • Set up chart of accounts
  • Always keep your records organized
  • Track your expenses
  • Keep your daily records updated
  • Record every financial transaction
  • Choose the right bookkeeping software
  • Make financial reports on defined intervals (daily, weekly, monthly, quarterly)
  • Ensure record security
  • Periodically re-evaluate your methods

If you want to accurately keep track of financial records, then you must understand the importance of bookkeeping. Bookkeeping is an essential function in your business for both legal and financial management purposes. By keeping accurate records, your business can get a true snapshot of its financial health. When it comes time to file taxes, the importance of bookkeeping will become clear. Instead of sifting through a pile of documents to get the information you need, bookkeeping ensures that this information is meticulously organized beforehand.

Do you know what will help your business to run like a smooth working machine? Good bookkeeping practices. Good bookkeeping can help you avoid several payment issues and use your financial reserves efficiently to grow your business. That means your accountant won't get a clear picture of your company's finances and you can't make strategic business decisions.

Being a small business owner, you are faced with the crucial decision to prepare your books by yourself or to outsource your bookkeeping to an accounting firm. Determining to do your own bookkeeping can be tough for even the savviest of small business owners. Most start-up founders and small business owners feel this way in the early days of their business. It’s tempting to do everything themselves to minimize costs, and in some situations, it might make sense to handle your business’s bookkeeping on your own. However, if managed incorrectly, DIY bookkeeping can lead to expensive mistakes, such as miscalculating your available cash, incurring penalties for incorrect tax filings, or lengthy financial audits down the line.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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