(To my readers/followers, please read on. This topic, although for businesses, can actually be applied to our personal lifestyle.)
Your Accountant is an integral member of your business. When you help him, you help your business. Helping him will make him understand more about the business. The more he knows about the business, the better financial information he can provide the owners. Better financial information leads to better decision making. Better decision making is better business. Better business equals business success!
So how do we help our accountant? Be organized with your files. Bank records and other financial records should be complete.
1. Permanent files – They should be complete and organized. These are your articles of incorporation, article of organization, EIN letter from the IRS, Account Number from the State, business licenses, permits, etc. Having these handy and accessible makes it easy for you and the accountant.
2. Deposits records – I am old school. Businesses must have duplicate deposit slips. The duplicate deposit slip should explain the reason for the deposit and the source of the deposit. Write that down. It is so frustrating to see a deposit in the bank statement and nobody knows the reason for the deposit nor the source of the deposit.
3. Bank checks and other withdrawals – Take advantage of the memo portion of the check. Write down the reason for writing the check. A duplicate of the bank check is advised. For debit card withdrawals, businesses must control who can use debit cards. People who uses debit cards should keep the receipts and be able to give it to the accounting department to be used as reference.
4. Invoices and customer files – There must be a master file of invoices issued, digital or otherwise. All customers already have a file in our computers. But you should make a separate one especially when issues arise. These files are where you keep the correspondences, the duplicate invoices, etc., to preserve the history relating to the customer.
5. Vendor files and bills – No matter how we keep track of them, digital or otherwise, these files must always be complete. These files should be and can be relied upon, when paying the vendor. Promptness in paying the vendor and correctness of the amount we’re paying will depend on the completeness of these files.
6. Merchant Account and Business credit card records. – Completeness of merchant account records are of vital importance. Businesses nowadays do more business in credit than cash. Most businesses rely more on customers using credit cards than cash paying customers. Without good records, you will be one of those owners always doubting if you got all the monies your supposed to get. You are forced to accept them at face value.
We must also maintain good records of our own credit card transactions. Remember, for accounting, each transaction is an accounting record waiting to happen. The more the accountant knows will result to better financial records.
I have been professing completeness and organization of accounting records all this time. All of these organization and completeness of records will be useless if you lose information due to unforeseen circumstances. So please BACKUP your records regularly. On a daily basis if possible. I suggest that your end day task, before you leave for home, is to backup your records. So, if you lose your records, you actually lost only one day of work. Maybe, even less, because you protected yourself with a backup.
Thank you and good luck to you all!