First published on the ABN Her Business Blog
Have you buried your head in the sand when it comes to your business financials? Do you know where your money is being spent and how much money you have earned? Or do you simply get your books done (or not – shriek!) to get your BAS out of the way, pray that you don’t owe any money and get back to being busy? Are you afraid of knowing exactly how your business is going? I love that saying “feel the fear and do it anyway”, because at least if you do know the hard facts, you’ll be able to make changes. And you never know, your business might be doing better than you thought!
If you’re behind in keeping your books, you can get back on track. Here are some simple steps to accomplish this:
1. Collate all your paperwork into piles that relate to:
a. Invoices and payments made for business expenses
b. Invoices and payments received from customers/clients or a cash register summary
c. Payments made to employees
d. Bank and credit card statements, BAS, ATO correspondence
2. If this seems overwhelming, maybe it’s time to bite the bullet and enlist help from a bookkeeper who can sort it all out for you.
3. Are you using an accounting software package? You need access to this (or give your bookkeeper access to it) to get yourself up to date.
4. Enter all relevant information from a, b and c above.
5. Take your bank and credit card statements, and check (reconcile) that all transactions are accounted for in your accounting software program. Make sure to include any cash transactions as well. If you have no idea how to reconcile, simply look at 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 a bookkeeper/accountant to complete the reconciliation process.
6. By now you should be up to date. It’s time to celebrate – woo-hoo! If you had assistance to get back on track make sure you pay their bill promptly. Let’s now consider your maintenance program, because you don’t want really to get into this position again, do you?
7. Maintenance mode – repeat steps 1, 2, 3, 4, 5 from above on a weekly or fortnightly basis to keep on track. The important thing to remember is that it is much better for you and your business to KNOW your numbers than to go into a cold sweat and have no idea!