What Does an Effective Bookkeeping System Look Like?
Bookkeeping is a process designed to accurately track income and expenses, facilitate the flow of money through the business and provide reliable data in a timely fashion. A good process includes schedules, deadlines, and a system of checks and balances. How do you know if your system is working properly?
- Sales invoicing is completed promptly
- Receivables are collected timely
- Vendors are paid on time to avoid late fees and take advantage of payment discounts
- Bank, credit card and loan balances are reconciled and accurate
- Financial data is reliable and readily available
- Sensitive information is secure
- Taxes are filed and paid promptly to avoid penalties
- Cash Flow is positive and predictable
- The process is documented to easily facilitate staff changes
- The system functions relatively seamlessly
- The owner(s) have confidence in the system and it no longer causes stress