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The TOP DIY Bookkeeping Mistakes Shop Owners Make… and How To Avoid them
First off, we encourage you to add a professional bookkeeper to your team. However, sometimes that’s just not an option so here are some tips and a sample checklist should you decide to “Do Bookkeeping Yourself”.
The goal of this post is to show you how to avoid costly mistakes in your books. These mistakes will cause you stress, worry, loss of sleep, and extra tax burden you don’t need. Keeping books can be tedious and time consuming, but with a well established plan, you can create and maintain accuracy in your books.
Think of this as a repair manual for the most important car that will ever enter your shop; your financial records and your financial future. The first time you work on a car you’ll pull up Identifix, iFixit or Workshop Manuals.
Finances are the same way. If you’ve be dropping receipts in a desk drawer along with vendor invoices and check stubs, it’s like ignoring the basic maintenance on any vehicle so the best time to begin organizing is RIGHT NOW! A suggestion is to run the checklist below as often as necessary to maintain your books, but the recommendation is not longer than every month. Periodic financial maintenance is as important as oil changes and tune-ups.
To start, consider every 14 days until you have developed good habits. You may even want to start weekly or even daily. These are your books, so do whatever serves you best, but get started today.
Here’s a sample checklist to get you started. You can always customize it to fit the needs of your shop. You may also find other resources online or a local bookkeeper who has developed a checklist that will serve you well.
Monthly Checklist
Make Sales Tax Payments
Make Payroll Tax Payments
Accounts Payable
Gather all bills
Code Bills into the accounting software
Confirm there are NO Duplicates in Accounting Software
Confirm Available Funds
Make sure all bills have been paid
Accounts Receivable
Have all invoices been paid
If not, track them down and get paid
Collect & Upload Bank and Credit Card Statements
Reconcile Bank and Credit Card Accounts
Review Information
Review Financial Statements
Notice the first two items on the checklist concern taxes. Sometimes these two items can be the cause of major stress if the payments are late or not at all.
How many stories have you heard about businesses who have had to pay extreme fines and penalties? Some have had to close the doors and sell off their assets for pennies on the dollar to pay their tax bills.
Keep in mind, each item on this checklist is important. Once your begin to follow this financial repair manual, you will become more efficient at keeping your books. You may even get to the point that this is not a headache, or a pain, but a rewarding series of steps that have your books looking good.
Should you decide to DIY your books, a professional bookkeeper can still be a valuable resource for information. During a consultation, she can give you knowledge and resources that will help you along your way. Would you like to know what the best accounting software is for your shop, ask your bookkeeping pro.
A good bookkeeper will have a heart to help people and can steer you onto the superhighway from the back country roads of finances. Contact her today for a consultation and some valuable advice.
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