Minding Your P's & Q's in Bookkeeping - 8 Handy Points
“It’s tough being a stickler for punctuation these days. One almost dare not get up in the mornings.” So says Lynn Truss, in her humorously informative book, Eats Shoots & Leaves: The Zero Tolerance Approach to Punctuation. Here at HR Business Solutions, we’re sticklers for tidy books, which is why we get excited about bookkeeping clients asking us to go through and make sure everything is correct (or that it gets corrected!).
If you’ve ever said to yourself, “I hate the details – but I know more or less what’s been done in my bank account this month” then we’d love to put all the P’s and Q’s in order for you so you’ll have an accurate picture of “the big picture.”
Here’s why meticulous bookkeeping is so important:
1. You need to practice financial responsibility and learn how to manage cash flow. Can you pay yourself after you pay your bills?
2. Keep up your good credit with your vendors and credit cards. Pay all of your invoices on time.
3. Watch your personal credit score. It can hurt or help you if you want a business loan. Remember to keep your personal and business accounts to avoid confusion about what is affecting your credit score.
4. You’re part of the local business community. We want you to be successful.
Now for a quick checklist to get your books in order for the fourth quarter:
1) Go through your 1099 contractors in your vendors list and make sure that you have a W9 on file for each one who is making more than $600 per year. You are required to have their W-9 on file – it is a safe harbor for you because it states that the contractor knows that they are not an employee and will not have workers comp or receive overtime. Click here for a W-9.
2) Reconcile all of your bank and credit card statements to date.
3) Do you have a large number of items in “uncategorized” or “ask my accountant”? Try to whittle that list down and put items in their proper category.
4) Reconcile your merchant services account and make sure that all deposits that they said went into your bank account actually went into your account.
Join the conversation! Let us know what you’ve discovered about the importance of keeping tidy books in your company.
Lynn Talbott, MBA, PHR, has over 20 years’ experience consulting with entrepreneurs of small to mid-sized businesses in the HR and office management capacity. Her specialty is Office/Human Resource Manager coaching and training and finding practical solutions for bookkeeping errors and HR blunders. Lynn has helped manage over 50 business start-ups and many of those companies continue to rely on her expertise today as they continue to grow.