It goes back to that old adage – you must be organised. It sucks but unfortunately it’s the only way that you can feel no stress about your numbers. It’s the ‘not knowing” that stresses everyone out. What do I mean by “not knowing”?
Well, do you know how much revenue you made last month? Are you aware of all your expenses that were incurred? Are you aware of the money you owe and what is owed to you? If you are not aware of these things, you are not running a business, you are living in a fantasy world. Harsh I know but the truth hurts!
If a feeling of dread overcame you when you read the above, you’re probably thinking, what do I do now? Simple, follow the steps below.
1. Collect all your paperwork together and sort into piles that relate to:
a. Supplier invoices and payments
2. Make the decision to either sort the mess out yourself or hire a bookkeeper / Virtual Assistant that can sort it all out for you. Unsure what to look for in a bookkeeper? Click here and subscribe to receive a special report on what to look for.
3. Do you have a computerised accounting software package? You need to have access to this (or give your bookkeeper access to it) to get yourself up to date.
4. Enter all relevant information from a, b & c above.
5. Take your bank and credit card statements, and check (reconcile) that all transactions are accounted for in your accounting software program.
Even if you do not feel comfortable with reconciling as a process you can simply use a bank register (or credit card register) within your accounting software to check that each item that is on your bank statement (and/or credit card statement) also appears in your bank register. Then you can hand over to someone else to complete the reconciliation process (knowing that as far as you can tell all of the transactions are entered). Remember that the bank (or credit card) statement is considered the holy grail (except of course if there are cash transactions involved). All of your statements must be checked (reconciled) in order for your records to be accurate and to complete accurate BAS returns.
6. Okay, so if you have completed this yourself give yourself a huge pat on the back (insert glass of wine, beer or chocolate, whatever is your congratulatory gift to yourself! – I like chocolate myself!) If you have handed this task over to anyone else and it is now completed, congratulate yourself (as above) and them , pay their bill promptly and look forward to maintenance mode, because you do not want to be in this position again, do you?
7. Maintenance mode, well this needs an entire article so stay tuned for this in the next newsletter. But, the important thing to remember is that it is much better for you and your business to “KNOW” your numbers then go into a cold sweat and have no idea!