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Bookkeeping concerns slow down during the summer months. Every year I see business owners and entrepreneurs uninterested in their semi-annual bookkeeping during the summer months.
I’m sure this has something to do with the warm weather approaching so people think about traveling, soaking up the sun with friends, enjoying time with their children, and getting outdoors.
However, I believe the semi-annual bookkeeping review allows for a grasp on bookkeeping errors. I will share 5 reasons I feel it is important.
Before we get started let me remind you to sign up for my free Bookkeeping Simplified Guide. My Bookkeeping Simplified Guide includes free access to my method on how to put your bookkeeping on a schedule.
How is your business comparing to last year?
A semi-annual bookkeeping review determines if your business is doing better or worse than the previous year. If your bookkeeping records are up to date, you can compare previous year profits with current year profits.
Now is the time to make changes to marketing and amp up thoughts on advertising for the months ahead. Use Labor Day, Thanksgiving, and Christmas to your advantage. Does your business sell products or services?
Use the holidays to get people thinking about discounts and purchasing products for family and friends.
Have you checked in with your CPA or Tax Adviser?
Now is the time to start examining those end-of-year tax payments. If your business is doing well this year, you may be in for a surprise at the end of the tax year.
Your federal payment may increase based on revenue. On the other hand, if your business is falling off the map and has not done as well as expected you may not owe or owe less than expected.
A review with your CPA or Tax Adviser helps you stay on track.
Have you reconciled your monthly statements?
If you have not been reconciling your bank statements don’t wait. Do it now! Now is the time to make sure all of your monthly record keeping transactions align.
I like to think of accounting software as a map of the stars, one star connects with another. You’re basically connecting the dots. When you reconcile your bank statements, you are verifying all your hard work is in balance.
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Have you run a trial balance?
The easiest way to explain a trial balance is by telling you that a trial balance is a list of all the general ledger accounts. Your credit and debit accounts will equal which means that your numbers line up.
If you are familiar with bookkeeping and accounting, you may notice a negative where a positive should be or vice versa. A trial balance puts you back on track before the months continue and you can’t figure out where something went wrong.
Some people will run a trial balance monthly, quarterly, or semi-annually for peace of mind.
Are you still doing your own bookkeeping work?
If you are continuing to do your own bookkeeping work, but don’t feel like it’s up to par then you should consider outsourcing your bookkeeping. By outsourcing your bookkeeping, you save time, money, and the headache of knowing your financials are accurate.
Bookkeeping should be completed regularly so receipts, expenses, and revenue are not missed. Bookkeepers can work with your CPA or Tax Adviser and they can assist with financial statements for end-of-year taxes, big purchases, budgeting, and continued growth of the business.