Does your back-office need an accounting clean up due to messy bookkeeping or catch up accounting for outdated records? Up-to-date accurate data and timely access to financial information are more important than ever in today’s fast-paced, data-driven marketplace.
In our experience, we find that business owners such as those of small private corporations, or freelancers, contractors, and sole proprietors often wear many hats within their organization. As business owners typically prioritize revenue generation or operations over bookkeeping, the accounting and reporting generally becomes neglected, rushed, or performed by non-professionals. Bookkeeping errors or messy accounting records may require accounting clean up. Decision-making should be based on reliable financial information.
The need for accounting catch up intensifies for clients at year-end, tax time, or when trying to make informed decisions based on incomplete accounting records. Implementing accounting and business solutions to manage finances regularly will help save time, reduce stress, and improve your business health through better decision-making based on current information.
As a good starting point for your business, here are ideas for process change to avoid accounting clean up or catch up accounting engagements.
We suggest business owners utilize an online accounting program, such as Xero, Freshbooks, or Wave to stay organized. Most online accounting programs are integrated with other productivity inspired back-office applications. For example, if inundated with receipts or paperwork, consider going paperless. Receipt scanning applications can be programmed to automatically record data into your online accounting system, while securing and storing audit documentation for your business.
Once you’ve selected an online accounting program, it is wise to develop month-end accounting close procedures. A benefit of timely monthly financial statements opposed to annual accounting catch up is regular insight into your business’ financial health in real-time while also helping with better cash-flow management.
Save yourself time and get organized by separating personal transactions from business transactions. Open a business bank account and business credit card only for business-related transactions. Splitting out your business expenses from your personal will help ensure accuracy and minimize accounting clean up work. Your accountant will thank you for this.
In summary, here are the steps to avoid accounting clean up and accounting catch up so that your business can save time and focus on growth.
1. Leverage technology and do your accounting online.
2. Implement month-end accounting procedures.
3. Separately track personal expenses from business expenses.