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10 Habits of highly effective bookkeepers for small businesses

By Simoné Potgieter - Jul 16, 2018
10 Habits of highly effective bookkeepers for small businesses

Here are the 10 habits of highly effective bookkeepers for small businesses. 

  1. Reconcile your bank accounts –The bank accounts are essentially the root of your bookkeeping system. Ensuring that they are reconciled timeously will ensure that the ground work for your accounting records has been laid
  2. Ensure 12 payments in all accounts –Review your ledger accounts to ensure that standard expenses are processed to the same account every month (eg Telephone, Rent, Insurance, etc)
  3. Be your own VAT reviewer –Review your VAT to ensure that VAT is being claimed only on allowable expenses. If you are unsure of where you can and can’t claim VAT a consultation with your accountant should clear this up for you. Don’t miss out on the small things. Do a review of your sales to make sure that the VAT you are declaring on your VAT201 ties back to the sales you are reflecting on your TB. Before you pass your records over to your accountant, check your status with SARS to ensure that all VAT returns have been submitted and paid (you can do this on SARS e-filing)
  4. Capture information timeously –There is nothing worse than sorting through pages and pages of paperwork to try and remember what happened months ago. Try to keep your bookkeeping processed, at least, on a monthly basis
  5. Depreciation –Sometimes a big expense that gets processed by accountants at the end of each financial year is the depreciation expense (depending on your industry) and this sometimes takes people by surprise when they thought the results looked very good. It is best to put a monthly provisional figure through for Depreciation so you have an idea of that total expense for the year. Again, your accountant could assist you with this calculation
  6. Create meaningful results –A simple check of your trial balance at the end of every month should indicate if your results make sense to you or not. For example, a large credit balance lying on your Inventory account should immediately indicate that something has gone wrong in the processing
  7. Backups –Nobody wants to re-do months and months of work. A good principal to follow is to have a backup for the same amount of time that you would be prepared to re-do the work. For example, if you would be prepared to re-do a week’s work then you need weekly backups etc. Always keep an annual backup and make backups before you do any major changes
  8. Manage your petty cash and credit cards correctly –A payment to petty cash or to a credit card is NOT an expense. Ensure that expenses are processed as they occur
  9. Keep private and business expenses separated –If at all possible, have a separate business and private bank account. Keep your private expenses out of your bookkeeping to avoid any complications and tax/vat issues
  10. Use descriptive references –Everyone knows that trying to hunt through pages and pages of ledgers to look for proof that you have paid something could be a pain-staking exercise. Use descriptive references when capturing bank statements to enable easy future searches.

Having a neat and consistent set of accounting records not only gives you a good idea of how your business is doing but it makes your accountants job much easier and, in the end, will save you money.

For more information, visit Mazars Port Elizabeth at 30 Bird Street, Central, Port Elizabeth, or call 041 501 9700. Also visit them at www.mazars.co.za