Many businesses, their owners, and employees enjoy a relaxed work atmosphere during the summer months. Companies large and small often offer their staff the option of reducing their schedules in order to take advantage of their hard-earned vacation and beautiful weather. Owners may decide to take extra time off, leaving most tasks to their employees. Others may simply succumb to the lazy dog days of summer. Prioritizing our tasks becomes central as there is often less time to get the time-sensitive items off of our desks. This comes at the cost of other items that may be neglected or ignored entirely until summer wanes and autumn arrives, bringing with it the energy of a new school year. Record keeping, book keeping, and other accounting activities are some of the tasks put off until there is more time. Often we muse about accomplishing objectives if we only had “more time.” Well, now is the perfect time to refocus our attention, review our books and prepare for the upcoming tax season.
Last spring, I wrote about record keeping. That post is a valuable resource if you are thinking about starting a new system of tracking your business transactions. For those with a system already in place, a review of your records, where you may have left off and what needs to be entered is a good place to start. For example, is your accounts receivable up to date? Do you know if any customers are late with making payments? Do you know if you received payments but did not credit AR? Questions like these may seem trivial but solving any problems now will make tax season that much easier for everybody. Issues like these can spiral out of control if not kept up to date.
Overdue accounts should be billed again. Now is a good time to send out late payment notices, before the holiday season is upon us, as money may be harder to come by than at other times of the year. Depending on how messy things may have become, check to see if payments came in before sending late payment notifications to your customers.
Bank reconciliations are important because you need to make sure that your books match with the bank. It is essential to make sure that the cash you are reporting agrees with the cash that is in your bank account. Depending on how many checks are written and how many deposits are received, this can be a very time consuming process. It is best to perform this task monthly, if possible, to quickly identify errors and eliminate the tedious task of entering an entire year’s data in an accounting program.
Perhaps you are a retailer or a manufacturing company. You will need to know the amount of inventory you have on hand, your cost of goods sold (COGS,) works-in-process, raw materials, and many other details before you can produce financial statements. There are outside companies that can assist you in taking inventory if necessary. Addressing these concerns now is prudent.
Please email me or call me at (401) 383-9694 for more information. We can work together to see what kind of record keeping system will work best for you and your business.