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7 Aspects to Good Bookkeeping - Able Accountants

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bookkeeping tips able accountantsWe provide bookeeping services in Walsall and the wider West Midlands area for a range of clients, and often find various aspects to it being misunderstood or ignored. On the face of it, bookkeeping is straight forward and keeping an accurate tally of the figures in your books and in actual fact once the principle is understood it is a very routine task that various people can easily undertake. 
The challenge though is to first appreciate just what’s involved with this, therefore here are 7 pointers to help steer you in the right direction:

1. Understand Whether It Is Single or Double Entry Book Keeping

To save going into too much detail, check with an accountant the final purpose of the accounts, and which format is both needed and practical in your circumstances. Double Entry may mean bookkeeper gets more complicated but can help cross-check things nicely; this is where each transaction has two different aspects to it, with a debit in one ledger and credit in another ledger.

2. Realise the End Accounting Goal

So often a good set of figures and books will then help a accountant prepare accounts like profit or loss or a balance sheet for a particular accounting or statutory purpose. They can also be used to produce management and financial reports which can help within a business or organisation. 
Whatever the end goal, check at the outset what this is, as although the basic figures are the same the way in which they are presented along the way may change. In addition, you may need a Trial Balance and Ledgers at the end of the bookkeeping process ready for this accounting stage.

3. Make Sure a Matching Bank Reconciliation is Completed 

In short, every transaction you have in the accounts needs to match an actual payment transaction through your bank or payment method. So each bank receipt and payment needs cross checking and matching up nicely, with software available to help link these together more easily.

4. Don’t Forget Your Paperwork

In extreme circumstances a client can walk in the office with a carrier bag of receipts and invoices that all need matching up with the accounts! Each transaction, both an expenditure to a supplier or income from a customer, needs the right back-up paperwork to go with it, a job in itself if they’re not correctly logged and matched already. We blogged here about some practical ways of getting this ‘paperwork’.

5. Report on the Consequences 

Although this is more on the accounting purpose afterwards, this critical stage of getting the books in shape can help identify issues that need addressing. So whether that’s a VAT return to complete, a tax liability to resolve, or issues of arrears and what is owed to you by a customer or what you owe a supplier – these all need identifying sooner rather than later

6. Note the Income & Expenditure

Don’t forget that it’s that simple – to note what income you receive, what expenditure you incurred, and so what’s basically left. Be clear on what receipts and invoices fall on which side of the income/expenditure fence, and even look into basic accounting principles of debits and credits and a profit and loss account.

7. Understand How You’re Processing Things

So it may be a simple daybook, and ledgers for a supplier and customer that need manually updating and then checking. Or it may be using high-tech software and cloud based virtual services and systems to produce these. Whatever it is, make sure it’s not only right and cost effective but effectively used by people.

8. Assign the Right People 

It may be just the one bookkeeper completing changes, or it may involve others preparing them and then another checking and completing them. Both methods can work depending upon the circumstances, and the pros and cons of each need exploring. 
We often work with clients who are encouraging someone else within their business to produce the main books, and we simply assist say every year to check them. 

9. The Final Sanity Check & Tweaks

So the books are done and ready to roll, however those final checks and tweaks are always worth checking, ideally with a fresh set of eyes. After figures come through in the after-accounts, then check that these make sense and that there are no human or process errors. 
Also, final accounting changes like deprecation can help sharpen things up nicely
In summary, it’s important to know the process needed for bookkeeping, who will be involved, and what the actual tasks are. Once these are in place, then the actual books should be straight forward, with expertise at least every year helping to check them and then use them for all kinds of accounting and financial purposes.

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