10 Easy Steps to Accurate Financials!
These 10 easy steps will help guide you through a process to insure your financials are accurate and reliable. Since many important decisions are based on this information taking a few minutes to insure their accuracy may save you hours in the future.
1. Reconcile Credit and Bank Accounts every month.
There are a few companies that reconcile their credit accounts every month. Credit cards are actually negative bank accounts. You withdraw money and then make a deposit. By reconciling these accounts you are able to determine if there is anything suspicious. Doing this along with your bank statements allows you the peace of mind that everything charged is booked.
2. You find a discrepancy, what now?
Download a CVS file from your bank it will make your reconciliation quick and easy. Since this opens in excel you can group and sort easily.
3. Monthly run a Balance Sheet and P & L.
By column formatting these you will be able to take a thorough look at your numbers and quickly see trends. Quickbooks offers an easy way to do this.
4. Use projections to keep your eye on the prize.
Even if you are not sure how to project income, expenses and cash flow immediately. Try and try again. You may not be accurate in the beginning but it will open your eyes to what is really occuring in your business. You will find that by checking this throughout the month you may be able to change something before it hurts.
5. Monthly do a year to date review of accounts.
By performing this step you will quickly see if there is a number in an account that does not belong. If you happen to use QuickBooks and find a discrepancy you will be able to double click on the item and easily move it to the correct account.
6. Exercise your mind.
Before you look at numbers think about what you expect to see and then explore any significant variances. By doing this it will help you have an unbiased view of what is actually occuring in your business.
7. Identify problems before they become problems.
Think about what has occured operationally this month and then look at your numbers. There may have been issues that were out of your control but there may be some issues that you can correct. This will allow you to look at your financials from a different angle.
8. Trust someone.
The more eyes the better. Have a trusted friend or business associate review your notes and numbers. It is quite amazing how a different set of eyes can see a discrepancy that was right before your eyes. Obviously this needs to be someone you trust.
9. What the heck is this?
Double check entries made by a bookkeeper. There may be entries made in accounts just because they had to be put somewhere and they had no clue where? Usually it is an insignificant item but those items tend to add up quickly.
10. Payroll Liabilities could be a problem.