Bookkeeping is often one of those business tasks that rarely gets any notice until it needs major attention—namely because when bookkeeping needs attention it means something has gone terribly wrong. Otherwise, bookkeeping and the bookkeepers that are managing it tend to move along on their daily tasks without much oversight or attention. Unless you really prefer waiting until disaster occurs, we suggest paying regular attention to these 5 ways your bookkeeper can ruin your business—so he or she doesn’t!
Business is doing well, right? You have tons of orders and clients and you’re fulfilling expectations. You should be flush with cash! Except you’re not. At all. In fact, making payroll is going to be tight this month—all because no one is paying you and you had no idea. Accounts with 90, 120 and even 180 days in arrears will ruin your business—and so will the bookkeeper that isn’t willing to keep you up-to-date on this information.
You aren’t required to keep receipts for amounts under a certain threshold but you do need to keep meticulous track of your expenses. If your bookkeeper is ignoring small amounts all together, you will ultimately be throwing away a much larger aggregate sum later. However, keep in mind that it is still better to keep receipts even if you don’t have to—answering questions during an audit will be that much easier and keep your business from ruin.
Not all office supply receipts are created equal—but if your bookkeeper treats them as such, this could ruin your business. A few hundred dollars in paper and pens is typically an immediate expense but that same amount spent at the same store on a new printer could be booked as an asset to depreciate. Knowing the difference could mean the difference between ruin for your business.
There is nothing worse than a burgeoning suspense category on your books. All of your expenses should be categorized properly by your chart of accounts and handled correctly. Categorizing expenses should generally be seen as a fairly standardized practice—make sure your bookkeepers are following GAAP (Generally Accepted Accounting Principles) to keep them from ruining your business.
The most important of bookkeeping tasks, this single event is so often ignored that it makes our head spin. If books aren’t reconciled and closed every month, you leave your accounting data open to a world of problems, from incorrect entries to more severe fraud and negligence.
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