This habit will help you eliminate unnecessary expenses and spot errors, saving you time and money. Poor bookkeeping can also result in tax errors and penalties, missing out on tax deductions and credits, and an increased risk of an audit. This will catch any transaction posted to an account after it has been reconciled and avoid messes for everyone. As a bookkeeper, it’s your responsibility to keep your clients’ books in order. Accounts Receivable – Record any bills that are overdue and reconcile any accruals. Make sure to track your payments and follow-up with customers.

And, you can quickly generate key financial statements, like your P&L and balance sheet. Over time, things get pretty messy—especially when you’re busy. And in business, the same thing can happen to your accounting books. Our team of skilled bookkeepers and accountants is ready to tackle any client’s bookkeeping clean up with expertise and efficiency. We’ll dive into the nitty-gritty of your financial records, pinpoint any discrepancies, and bring your books up to speed. Check your bank statements against your accounting records to catch any mistakes, ensuring that all transactions have been recorded properly.

AI In Accounting and Its Growing Role

Establish an expense tracking system to accurately categorize all of your business expenses. Putting a process in place for reviewing and authorizing expenses can prevent tax filing errors and potential fraudulent activity. For efficiency’s sake, remove any unused or necessary accounts from your chart of accounts. This will ensure that it’s organized and accurately shows your business’s current needs.

Though most errors in bank transactions are caught during the reconciliation process, you should verify the ending balance in each account once you’ve finished your monthly bookkeeping process. By following the same process each month, you can ensure your clients’ books are in order and that you have not missed any steps. We are sorry to hear if you have been experiencing confusion with your financial records. The most important thing you can do is get cleaned up, organized and learn how to stay on top of your financials moving forward.

– Recoup 20+ hours every month

Many small businesses begin as side projects; many barely record sales or revenue at first. Most fledgling businesses keep records of when they receive cash from sales or spend cash to cover bills, and leave it at that. If your business still handles its books this way, you should strongly consider moving to the accrual method of accounting, and this is the perfect time to do so.

They have efficient processes in place and know how to identify errors and sort them out quickly. Not only that, but they can also put up safeguards to prevent the same thing from occurring again. There are times when our financial management gets a little messy. Maybe you have been handling your own bookkeeping for years and didn’t notice a few discrepancies until tax season came around.

Quick Turnaround Time

If you find yourself dealing with any of the above issues, it might be time to give your books some TLC. Messy, incomplete, and inaccurate bookkeeping can lead to a slew of issues that cost more than just time. Bad bookkeeping can also lead to hefty IRS penalties and (gasp!) audits. A little catch up bookkeeping now can save you big bucks down the road. Not only will you pay less in clean up costs, but you can avoid penalties, maximize deductions, and make better financial decisions, making for a great return on your investment. If you’re using an automated workflow system, this step may happen automatically.

• The sum of money your company owes to suppliers or vendors is called accounts payable.
• With accurate real-time information, the transparency created allows you to detect and correct instances of fraud, inefficiencies, and inaccuracies.
• If they don’t, adjust your records to match your bank or credit card statement to your accounting entries.
• Just apply the standard mileage rate, which incorporates expenses like gas and maintenance, and automate the process.

Having clean books will allow you to negotiate a higher price for your business. A simple, streamlined bookkeeping process makes periodic accounting (quarterly and annually) easier.One of the most important is what is just-in-time manufacturing a uniform process for invoicing and payments. Prepare adjusting entries like you do regular journal entries. If you struggle with disorganization in accounting, you need to know how to fix bad bookkeeping.