It is spring time and just as we talk about spring cleaning for your home you can do the same for your business accounting system. It is important to make sure that all of your accounting is in order and up to date. These are tasks that will not take long and should be done so there is no confusion with things at a later date. Clean up is something that can be done 2 times a year or at minimum once per year. It will prevent bills from being emailed to bad addresses or mailed to outdated addresses. Having one bad address could delay you getting paid by 60 days.You will avoid being late with paying bills if you have correct information from your vendors. This will also be a time where you can see how long it has been taking you to collect your money if you have not done so prior to this. If you do not have time to do this, hire someone. It is easy to find someone who is affordable. If you make this a priority once a year it will save you headaches in the long run. I suggest having a form letter to email clients and vendors stating the information you have in your accounting files and asking them to return the form only if there have been changes.
- Look at your accounts receivable list and start trying to collect anything that is 30 days or older
- See if there are any bills that are 30 days or older and if they need to be deleted or paid.
- Get a listing of all vendors and combine any duplicates.
- Combine any duplicates that are in your customer list.
- See if you have updated email addresses and contact information for your clients and vendors.
- Make sure that all your banking information is posted and reconciled.
- Reconcile all your Credit Card accounts.
- If you are being charged too much interest call your bank and try to negotiate lower terms.
- Review your budget and see if there are expenses that can be reduced.
If you do not have any accounting software please research what you would need for your business. The costs are affordable for monthly plans and are easy to get up and running. You should have a professional assist you with the initial set up and this will save you money in the long run. Once you have a system in place make sure to do your spring cleaning each year.