Do you close you books each month?
To make informed business decisions, business owners need accurate monthly financials. To maintain accurate monthly financials, you need monthly procedures for closing your books. It’s a very fundamental accounting guideline that gets overlooked by business owners and not knowing exactly where your business stands financially will be the result. I have some pointers to get you started on monthly bookkeeping procedures.
Have a target date that you start and finish
Having target dates for starting and finishing help you make sure you do not put off closing your books and keep you on track. Make sure your dates are realistic, don’t expect to close your books for March on April 1st. I suggest setting a starting date on the day you receive your bank statements and give yourself 3-5 business days (depending on the size of your business, number of transactions, how many systems you have, etc).
Tie back your bank statements to your bank account
Some business owners are surprised when I tell them I need their bank statements to help close their financials. Having double checks is key and getting the monthly bank statements helps make sure every transaction is accounted for in the accounting software. I also suggest having your bank include checks and deposit slips on the bank statements. It may cost a few extra bucks each month, but worth it to have all the documentation you need.
Review all revenue & expenses streams
POS systems, accounts receivable, accounts payable, etc all put together do the majority of the talking when it comes to where your financials sit. Most of these will tie back to transactions in your bank account, so always make sure to review and pull reports to tie back to you bank.
Review everything one more time before you close
After I run through the closing procedures, I sleep on it and use the next day to review the closing procedures one final time. I would say 90% of the time, I end up finding something that I missed. Go back to review to give yourself a double check to know you are 100% confident in what you present to your clients.
If you have any questions or would like me to work with you on putting together monthly procedures, please contact me today!