Periodic bookkeeping is a common practice in all businesses. While some generate accounting reports on a daily or weekly basis, each month businesses are required to remit various statutory deductions to relevant bodies, as well as issue and settle pending invoices. This makes it necessary to maintain a monthly bookkeeping schedule.
Of course, bookkeeping is a daily process, but there are a few things that need to be in place to make sure that the daily transactions lead to sound reports at the end of the month.
But that can only happen if you put in place proper mechanisms to combat some of the common bookkeeping mistakes. To help you with that, we’ve compiled a full list of checks and balances that have worked for most of our clients drawn from the manufacturing, real estate, and IT sectors.
As cliché as that sounds, a decent number of businesses do not send out invoices to customers on time. Invoices tell your customers how much money they owe your business for goods or services received.
It is important for your team to issue invoices to customers when the transactions are still fresh in their minds; you want as much as possible to avoid sending out an invoice relating to two or so months ago. Sadly, most people get dodgy when it comes to paying for supplies received several months ago.
Tip: if you normally issue invoices on a monthly basis, make sure that you send out one before the month fully comes to an end; this allows your customers to plan their bills well while making sure that your money is received on time.
I know this for sure – not all businesses update their customer accounts on time. I’ve seen businesses lose clients due to misstated balances.
While you may innocently send out a customer statement with an incorrect balance due to one or more payments not being registered in your system, your clients see the complete opposite. They may read dishonesty, and guess who’s losing a client…
The point is you need to put in place a structured way of updating each and every customer payment to avoid problems with your customers.
The same way you record and maintain accurate balances for each of your clients, you need to record the business expenses correctly and accurately.
Make sure that the balances reflected on the bills are correct, as well as the due dates. Avoid piling bills up, this will only put too much pressure on your income at some point in the future.
If the terms of supplier X state that the payments need to be received within 30days from the invoice date, try as much as possible to settle the bill by then. This ensures that you remain in good books with your suppliers in case of a rainy day.
But if, for a reason, you’re unable to settle a bill on time, be sure to communicate the same to your supplier early enough.
Your employees are the biggest asset in your business, and this means that compensating them on time should be a priority.
You know what they say – happy employees lead to happy customers.
Employees show up for you, they literally keep your business afloat. You owe it to them to compensate them fairly and on time. So, make it a priority to prepare the payroll on time, and send out payslips for each one of them.
The goal is to show acknowledge their importance in the business, not just through confessing it but by actually demonstrating it in terms of fair and timely remuneration.
Lastly, you’ll need to review the forecasted cash flows. Review your targets and try to see whether you’ve met them or not. If you have, challenge yourself by setting higher targets, but if not, review and put in place corrective measures.
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