Any business, big or small is reliant on strong bookkeeping structure and accurate financial records. A business has the responsibility the eliminate poor accounting practices and implement internal controls to reduce any risks which the organisation may incur. Large entities have struggled or even failed due to the lack of completing these basic accounting measures on a regular basis:
- Bank Reconciliations:
As in any industry Cash is KING! By preparing a proper bank reconciliation on a regular basis, the amount of cash you think you have is equal to the amount of cash you have available. For any larger entity, it is preferred that a cash reconciliation is performed once or twice a week to ensure obligations will be met when they become due.
- Supplier payments:
Keeping track of all amounts owed to suppliers is crucial for any business, as each supplier will allow for different payment terms it is important comply with those terms:
- to ensure deliveries are done on time by your suppliers and
- to establish a good reputation and credit history with suppliers.
- Customer statements:
A happy customer is a returning customer. Updating customer receipts on the customer reconciliation timeously after payment is received will ensure the customer will receive an accurate statement. Customers are more inclined to return if they have confidence in the business’s abilities they are dealing with.
- Other accounting transactions:
Although the above accounts for most of the transactions, there will still be other entries to prepare and process. Most transactions will be straight forward and easy to forecast. Ensure these transactions is processed on a regular basis. It is acceptable practice to measure actual costs to the budgeted costs to ensure the entity remains in a profitable situation. Ensure other balance sheet accounts are reconciled at least monthly.
By adhering to the above accounting controls, it will be easier to stay on top of your finances.