Bookkeeping is the basic tracking of everyday activities such as purchases, sales, deposits and paying the bills.
Refer to 2 sections separating monies coming in and going out:
1. INCOME
2. EXPENSES
TIPS:
BANK ACCOUNT
It is much easier for your accountant to keep track of the income you receive and what you're paying for if everything goes through one bank account and designated credit cards for business use only.
DOING YOUR OWN BOOKKEEPING
If you can keep track of your smaller daily invoices and purchases it will be easier and less expensive for you to have an accountant or bookkeeper take care of the rest of the accounting and bookkeeping.
FILING SYSTEM
A good filing system makes a big difference, not just in the file cabinet but on your computer as well.
File Cabinet Tips
1) Sort by drawer, file all accounts receivable (what is owed to you) in one drawer
2) File all accounts payable (what you owe) in another drawer
3) File credit card statements, bank statements, advertising information, notes, miscellaneous information in another drawer (with their own folders)
4) File all government paperwork in another drawer (again, separated in different folders within the drawer)
5) Label the drawers
6) Keep current years' paperwork separate from last years' papers
7) Sort by Folder, within each drawer, label folders that your work can be filed in...this is usually done alphabetically and separated by topic
8) Even for government folders label as 'GST Remittance' and 'GST Info'
File on Computer Tips
1) Sort in the same manner you would sort the file cabinet as mentioned above, in alphabetical order and by topic
2) Name the files with relevance to be able to retrieve them quickly later on
i.e. creating a letter for an overdue account to your customer John Smith written in a word program on January 1, 2006:
Suggested file name: 'ARJSmith012006'
Breakdown of file name (meaning):
AR = Accounts Receivable (monies owed to you)
JSmith = Customer Name
012006 = Date of invoice (month and year)
INVOICING
Be sure to stay consistent in the accounts used for invoicing.
i.e. You have an invoice for "Canadian Advertising Company"
Use in "advertising" account then always use that account don't switch back and forth from that one to office expense.
TAXES
Keep track of the taxes paid and collected - the accountant will need those to calculate the remittances.
