As professional bookkeepers, we interact with various businesses and learn about their financial systems. We’ve compiled a few key tips to help organize your financial processes and make things run a bit smoother. These pieces of advice are simple and easy to implement – but very helpful and effective!
Keep Business and Personal Separate
This is a simple but vitally important tip: don’t mix your personal bank accounts with your business accounts. Don’t mix personal expenses or receipts with those of the business. If you need to withdraw money from your business for a personal expense, then write a check from your business account and deposit it into your personal account. Maintaining separate accounts will help when analyzing profitability and provide an independent business record that will be extremely useful if any issues with taxes or the bank arise.
Deposits Must Be Timely
If you acquire a significant amount of receipts every day, it is best to deposit the receipts each day. Receipts should be deposited weekly regardless of the amount. All currency, checks, and cash items received should be deposited intact without any deductions for expenses or advances. If you need cash for an expense, use petty cash instead of what should be deposited. Lastly, don’t hold a large amount of cash in the office.
Document and Describe the Details
Descriptions on deposit slips must be brief due to limited space. Use the space on the slip to provide the customer’s name, bank account, or check number. Your documentation, however, should not stop at the deposit slip. Keep record of the details in a separate place. Depending on the sources of your deposits, you may want to keep record on separate forms according to the source. Be sure to keep detailed records on any other miscellaneous payments received. If there is an error in the transaction or you need to review your deposits a few months down the road, it will be helpful to remember the details!
Create a petty cash fund to be used for unanticipated expenses that are too small to warrant a check or that require cash. A petty cash fund is useful for small things like inexpensive office supplies or a staff lunch. Be sure that someone you trust is responsible for this cash fund! Every withdrawal from the petty cash should be recorded and approved. If you have several employees, consider doing random counts of the petty cash to be sure that all withdrawals are being recorded and approved.
Organizing and refining financial processes can be overwhelming. Behm Bookkeeping is here to provide personal, reliable, and professional accounting services that will allow you to analyze and grow your small business! Give us a call today!