What do you have to do today?
Marketing, sales, bookkeeping, customer support…how many different tasks do you have to do on a daily basis? As an entrepreneur, each day brings with it unique challenges, and with so much going on, it can be very hard to create and stick to regular routines.
This causes us to be reactive instead of proactive. And when you are reactive, you let key activities fall through the cracks and gravitate toward what’s comfortable. Nowhere is this more evident than when it comes to bookkeeping and tracking transactions.
Falling behind on making entries and reconciling accounts can have a detrimental impact on your business. For lawyers, failing to record a single trust accounting transfer could result in fines or even disbarment. Regardless of what type of business you own or industry you’re in, falling behind will require more of your time or money when you’re finally able to catch up. The chances of you making a costly mistake, like misreporting income, increase significantly as well. Misreporting, whether over or under reporting income, can raise a red flag to IRS auditors or take money directly out of your pocket.
Four Ways to Prevent Falling Behind
- Schedule Time
We’re busy. If we don’t schedule time for something, it’s likely it will never get done. When doing reconciliations yourself, you have to schedule time regularly. Schedule time each day, or at a minimum each week, in your calendar to focus solely on keeping up to date on transactions.
- Create a System for Capturing Transaction Details
Running a business today consists of many online and offline activities. Without a consistent process and system put in place to capture the details of each transaction, there’s no way to guarantee that your records are accurate. Whether you put all of your receipts in a file and take a picture with your smartphone, come up with a system to capture the details of transactions and organize them.
- Create a System for Recording Transaction Details
A well-organized system for capturing transactions can be completely compromised without having a steady way of recording these transactions. Missing entering a transaction or recording it twice is a costly mistake that will keep your books unbalanced and cause additional headaches during tax time. By knowing how and when you will record transactions, keeping up to date on entries will be far simpler than trying to reconcile every now and then when you remember to do it.
- Involve More Than One Person in the Process
We all need a backup and a plan b. Having a team in place to handle important aspects of your business is a must, even if you’re doing most tasks yourself. Consider having an assistant to check monthly transactions, hire an online bookkeeper part-time to assist, or outsource your services to a team that has processes in place to catch mistakes and stay on top of transactions.
Want to put a system in place to never fall behind again, learn more about how Kahuna Accounting can help and fill out the contact form on KahunaAccounting.com.