Waukesha Accountant Edith Christian CPA | Organize your Accounting

Tips for keeping your Accounting Organized for Small business.

1. Keep it separate. That new backpack for your kids isn’t a business expense, but your business credit card was handy so you used it. Sure, you can pay back your business for a personal expenditure, or the other way around, but if you’re going to do it right you actually have to record an accounting transaction. Things get complicated fast, and you don’t need that headache. By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place. Some applications can automatically handle the behind-the-scenes accounting for crossover expenses, but even so, we recommend handling business and personal finances as independently as possible.
2. Call in a pro. Since the days of the abacus, accountants have been trusted and respected allies to small business owners everywhere. Their intimate knowledge of the profession as well as tax laws in their jurisdiction will save you money almost every time. I know how tempting it can be to save a buck and do it yourself, but it’s almost never more cost-efficient in the end. An accountant will almost always find more deductions and keep you penalty-free. On that note, the cleaner your records, the fewer billable hours you’ll have to pay, so make sure you’re organized year-round. But when things get technical or taxes are due, save yourself the money, time and headaches and call in a trusted professional.
3. Pencil it in. Actually, use a pen. A permanent marker even. Set aside about 15 minutes every week — that’s the equivalent of just one Facebook visit every seven days — to organize your finances, and don’t let other things take priority during this time.  You’ll have more insights into your business, be able to make more informed financial decisions and have everything organized when tax time approaches. Something always feels more pressing than your finances. But when you find the time every week, you’ll feel your stress levels — now and at year-end — fall fast.
4. Consider your people. When you’re looking for insights into your businesses spending, don’t forget to properly track what is likely one of your biggest expenses: labor. Whether you’re paying a full staff or you’re the only one on the payroll, make sure you’re tracking the costs of wages, benefits, overtime and any other costs associated with labor. By tracking your spending on labor, perks and benefits, you may find you have more money to incentivize your employees — or that you’re outspending your budget. Either way, doing the math now can help you make better decisions later.
5. Finally, don’t forget to get paid. This one seems pretty obvious, but you would be shocked at how many small business owners don’t properly track invoices and customer payments. If you’re not keeping proper records that you can make sense of at a glance, it could be months before you realize you have outstanding invoices. You could be collecting payments late, or missing some altogether. Make sure you’re properly tracking all payments due and recording when each invoice is paid, how long customers generally take to pay, and which customers you’ve had difficulties collecting payments from in the past.

Edith Christian Cpa Waukesha | Accounting Services for Small Business

Bank Reconciliation
^{Reconciling your business checking account each month allow us to keep your bank account, accounting, and taxes up-to-date.
Having us reconcile your account each month allows you to...}

• ^{Identify lost checks, lost deposits and unauthorized wire transactions.}
   
• ^{Detect and prevent excess/unjustified bank charges and ensures transactions are posted correctly by your bank.}

 

• ^{Know how your business is doing? You can't really know unless all accounts are reconciled and properly accounted for on your financial statement.}
   
• ^{Manage your cash more effectively. Proper management of funds not only saves money, it makes money for you.}
   
• ^{Protect yourself. By timely reconciling and promptly objecting to your bank about any unauthorized, fraudulent or forged checks presented to your bank and paid by that bank, you can relieve your agency of responsibility for the shortfall and transfer the risk to the bank. This reason to reconcile alone should be enough. Crime exists.}
   
• ^{Sleep Better. You will sleep more peacefully at night knowing your bank accounts are reconciled, in balance and that all escrow funds, accounts, checks and disbursed funds are properly accounted for.}

 
^{Income Statement
An income statement, otherwise known as a profit and loss statement, basically adds an itemized list of all your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period. An income statement allows you to...}

• ^{Track revenues and expenses so that you can determine the operating performance of your business.}
   
• ^{Determine what areas of your business are over-budget or under-budget.}
   
• ^{Identify specific items that are causing unexpected expenditures. Like phone, fax, mail, or supply expenses.}
   
• ^{Track dramatic increases in product returns or cost of goods sold as a percentage of sales.}
   
• ^{Determine your income tax liability.}

^{Balance Sheet
A balance sheet gives you a snapshot of your business' financial condition at a specific moment in time.
A balance sheet helps you...}

• ^{Quickly get a handle on the financial strength and capabilities of your business.}
   
• ^{Identify and analyze trends, particularly in the area of receivables and payables. For example, if your receivables cycle is lengthening, maybe you can collect your receivables more aggressively.}
   
• ^{Determine if your business is in a position to expand.}
   
• ^{Determine if your business can easily handle the normal financial ebbs and flows of revenues and expenses?}
   
• ^{Determine if you need to take immediate steps to bolster cash reserves?}
   
• ^{Determine if your business has been slowing down payables to forestall an inevitable cash shortage?}

^{Balance sheets, along with income statements, are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant you.}

^{Maintaining a Clean General Ledger
The general ledger is the core of your company's financial records. These records constitute the central "books" of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.
Having us review your general ledger system each month allows us to hunt down any discrepancies such as double billings or any unrecorded payments. Then we'll fix the discrepancies so your books are always accurate and kept in tip top shape.}