With the costumes, decorations, scary movies and carved pumpkins, Halloween can be an exciting time. But for some businesses, it can be a reminder of their accounting horrors.
Luckily, there are some simple ways to avoid accounting nightmares and stay on top of your books this Halloween and beyond. So, dust off the cobwebs and enjoy these bookkeeping treats that will hopefully shake the fear.
Duplication is the source of many a bookkeeping mess.
Bills, invoices and receipts entered onto an accounting system multiple times can cause pages of items which seemingly don’t reconcile to anything and can over inflate sales and costs.
Make sure you review your finance system regularly to remove any entries that have been doubled up. Use supplier statements to cross-check against, make sure that what is showing as outstanding actually is and ensure that when you’re reconciling it is matched to the correct invoice or receipt.
While this might seem obvious to some, many entrepreneurs don’t create separate accounts until things get irrevocably intertwined. To make your bookkeeping easier, make sure you have separate bank accounts and credit cards.
Mixing personal with business spend is a gruesome no no and one of our pet hates! If you know there’s personal spend included in your business accounts identify these and classify them as drawings so that they can be appropriately dealt with by your accountant.
Always carry a personal card and a business card with you as you never know when you’ll need to pick up something for the business and vice versa.
Change is scary
When business owners think about changing their accounting system, they normally put it in the same category as changing their bank account … scary, hard, time consuming with lots of set up required and probably lost information along the way. You can almost hear the ghostly groans.
Because of this they stick with the same system they’ve used for years even if it’s antiquated, manual, costly and they’re thoroughly frustrated with it!
If you’re a small business owner and not already on a cloud accounting system, such as Xero then we strongly suggest you should be. Whether you are at the office, home or even on the road, your financial records are accessible when you need them most, making your bookkeeping quicker, easier and saving you time.
Don’t break the rules
You can save time when reconciling in Xero by using bank rules to help reconcile frequently recurring bank statement lines that you don’t need a receipt for. Bank rules allow you to set criteria for transactions and automatically allocate them to the correct accounts. Examples of things you might use a bank rule for are wages payments, directors loan payments, bank interest etc.
If you haven’t been consistent when choosing your spend categories, then your financial reports won’t make sense and will be a nightmare. It will also be impossible to track if you’re missing anything.
We’ve seen a coat posted to office equipment, rent as accounting fees and a whole host of purchases dumped in ‘general expenses.
Review your books in detail and check each classification. Make a note of the regular costs and suppliers and which account code they should be posted to. This is easy with cloud accounting systems such as Xero which allow you to set up rules and default categories by supplier.
With these tips there is no need to fear your finances! We hope you found our tips useful and if we can be of any assistance with your finances please get in touch.
Happy Halloween 🎃