For reasons beyond satisfying your accountant and Uncle Sam each year it’s important to keep up with your bookkeeping so you can assess your income and expenses – really, how do you know if you are making money or spending too much on office supplies unless you have up-to-date, real time info?
Below is what I consider to be the most super-duper important things you can do that will eliminate some of the frustration you may associate with handling your bookkeeping.
- Perform your bookkeeping daily
- Don’t go overboard with your Chart of Accounts – the more detailed it is the more time and consideration it will take to decide what account to use
- Have a filing system that is easy to use and access (make sure to retain records for the required number of years – IRS info here)
- Reconcile your bank statements upon receipt
- If you use QuickBooks enter your credit cards into QuickBooks and also reconcile them
- If you use PayPal or Google Checkout frequently also add them as a bank account in QuickBooks for easier reconciliation
- Don’t co-mingle personal and business funds
- Buy “checkbook” sized tax organizer such as this one – keep it in handy and update it immediately with mileage, entertainment, etc. (Use code “yva” on any purchase at the site to save 10% on your order)
- Make sure you send out 1099-MISC statements by IRS deadline to all service providers you pay $600 or more each year
- If you really hate it, outsource it to someone (like me) who enjoys it!
What else do you think belongs on this list? Feel free to add your comments and suggestions for other people!