Introduction
It is not at all debatable that keeping account books organized is critical to the financial health of any business. Perhaps the most relatable benefit of this is when tax season comes. But the benefits of keeping books organized goes beyond just tax season. It can improve many aspects of the business, including cash flow management, invoicing and payment cycles, financing – the list is endless.
With that said, this article will provide low-tech ways for business owners and managers to keep books organized.
Low-Tech Ways to Keep Books Organized
Write the Job Title/Number on the Top of Receipts
The very thought of having to organize receipts is usually dreaded by business owners, especially in businesses that issue lots of them. This is often due to business owners forgetting what the receipts are for when it’s time to present them to bookkeepers for categorization. But there’s an easy way out of this problem. When issuing receipts, write the job title or number, whichever is applicable, on the top of the receipt, as this helps you remember what the receipt is for at a later date.
The 3 Box Receipt System
One of the best ways you can properly organize your receipts is the 3 box receipt system. This essentially involves keeping receipts in three different places for easy access wherever and whenever you may need them. Keep one in the car, keep another in your house or office for receipts that need to be logged into the system, and one main box labeled “current year” for receipts already logged into the system.
Write Details in the Memo of Your Checks
On countless occasions, we have heard business owners running into problems trying to balance their books because they forgot what they issued checks for. Not that there isn’t proof or anything, they just don’t remember what the check was for – happens to the best of us! To avoid problems down the line, business owners should make small notes on the checks as soon as they are issued. It usually takes about a minute but can save hours of head-scratching.
Keep A Small Pad in Your Car to Jot Payments
One low-tech and easy way to keep track of payments, particularly in cash, is by keeping a small pad of paper in your car and jotting down payments received as soon as they are received. Not just the payment now, though, you should also jot down the date and where it came from. There’s more. You can also use the pad to record what each deposit was for after every bank visit.
Since we’re speaking of keeping things in cars, you can also keep a pocket calendar to track mileage in your car if you use it for both personal and business purposes. Record the miles traveled while using the car for your business and the corresponding dates. Give this to your bookkeeper to log for a proper and full accounting.
Conclusion
As a business owner, never overestimate your ability to remember the details of a transaction. Most of the problems small business owners have with bookkeepers stem from the business owners forgetting transaction details. So, ensure you follow the steps outlined here. They will ease the work you and your bookkeeper have to do when account day comes.
Organizing books is one of the most important steps to a healthy business financial health, but not the only one. There are others, and we at 3zprobooks are more than willing to help out with them to ensure the growth and development of small businesses.