Accounts Management

 

Guidelines for Good Record Keeping

 

Keeping good records is a tough chore at any time, but a few basic guidelines can help make life easier for both you and your accountant.

 

1. Pick an accountant and plan your bookkeeping system before you start the business.

2. Leave plenty of tracks – write things down logically and consistently (i.e. systematically).

3. Don’t use scraps of paper to jot down figures – use proper forms in bound booklets.

4. Deposit all cash received daily (if possible) and make all payments by cheque or petty cash.

5. Don’t take cash from the till for personal use.  If unavoidable, draw and cash a cheque.

6. Reimburse petty cash by cheque, not by taking cash from the cash register.

7. Keep very strict control over cash, especially overnight and in transit to the bank.

8. Check prices, extensions and totals on all accounts payable - initial them as being checked

9. Attach together all related forms such as delivery dockets, invoices and statements.

10. File all records and original documents in a logical and systematic way.

11. If necessary and at all possible, physically take stock of inventory every six months.  Also keep good stock records.

12. If using a computerised record system, always use backup data storage and keep backups away from the
business in case of fire or burglary.

13. Keep up-to-date and accurate records of accounts receivable.

14. Keep your business and personal financial records separate.

15. Talk often with your accountant.  They are vital resources.

 

When you can find the time, why not do some basic studies in bookkeeping and financial management? At least then you will have a better understanding of the language of accounting and will be better prepared to ask important questions.  If time won’t allow this, have your accountant explain exactly what your financial reports mean, in simple English.  Over time you will become comfortable with the numbers and begin to understand how to use them to stay in control of your business.