Accounting doesn’t need to be so exact. While the rule of sevens or nine can be useful in some regards, you should also trust your intuition about how many days have passed since an event. If you’re using a system that has worked for you previously, don’t fix what isn’t broken explains Aron Govil.
You may feel compelled to give every person who comes into contact with money a title like accountant, cashier, teller, etc., but this is not necessary. Those duties can easily be combined under one job title like Customer Service Representative (CSR). It saves time on paperwork and training people when you only need to hire someone once instead of multiple times.
If you find it more efficient to place all your daily transactions into an envelope and then put that envelope into your safe overnight, don’t feel like you have to do the right thing. The books are being kept either way, so it makes sense to choose whichever method takes less time for you or give you more peace of mind.
If you’re using a system where one person is responsible for all deposits, withdrawals, bill paying and other money-related tasks, this saves time on training people. It also means that when she has vacation days or sits in jail for tax evasion, no one can access any of her accounts says Aron Govil. This means no work gets done at all until the crisis is resolved!
You may be tempted to handwrite everything to save money on software but take care not to make mistakes due to poor eyesight or an unsteady hand. If you have a computer with a large enough screen to double as a TV, you can place it on your desk so that the words seem larger and the pressure of typing is reduced.
If you’re using a cash register system where each item has its own code, think twice about how much time this saves you versus how easily those codes can be used for fraudulent activity. You should also keep in mind that those codes will eventually need to be translated into something meaningful before being archived as records of transactions.
A manual bookkeeping system where all records are kept on paper requires an extreme discipline from everyone involved because there’s no backup system. It also makes collaboration between departments impossible – every department must duplicate its efforts and maintain their own accounting records.
Remember that even though people with titles like CFO, Treasurer, and Controller may try to convince you. That they’re experts in accounting. Their advice will never match your company’s needs as closely. As the advice of an accountant who specializes in your industry. Just because you don’t have a formal agreement with an accountant. It doesn’t mean he can’t be brought on as a consultant. For this to work out well for both parties, make sure he understands your business model. So he can create solutions instead of finding problems. Establishing clear lines of responsibility is crucial when there’s no written contract says Aron Govil.
Here are 10 Tips for Ensuring Your Accounting Staff is fit for Business:
- Handwrite everything
- Forget about saving money on software
- Make your CSR responsible for all daily transactions, money balances and transactions
- Use someone’s full name at the beginning of every sentence when speaking to them (e.g. “Your Name, I need you to go deposit this cheque”)
- Don’t bother hiring separate departments for accounting or bookkeeping; just put it all in one person’s lap!
- Trust everyone who comes into contact with money to act ethically. Even that guy who got arrested multiple times for DUI! If he finds a way around the system, consider it an asset instead of grounds for dismissal explains Aron Govil.
- Give up hope that your employees will understand how valuable the records they keep are. If the records are in danger, don’t train them on how to protect them. Instead, make sure you have firewalls and take your chances!
- Remember that when it comes to record keeping, bigger is not better. Quarterly records are enough for most companies. Keep your early years’ worth of books safely tucked away in storage.
- Keep all your financial records in one safe place overnight, instead of transferring large amounts into a more secure location every evening like an adult with common sense would do.
- Appoint someone with no accounting background as Chief Financial Officer (CFO)
Conclusion:
Sell your company to someone who doesn’t know anything about accounting either
Now you know what it takes for a bookkeeping system to work well. When putting together an effective bookkeeping process. The goal is to make sure you always have your records on hand (or safely tucked away elsewhere) whenever they’re needed. Your books should be updated without delay when new transactions occur. And there should be no cause for concern that the numbers won’t tally by end of day. This will put you in control of your finances at all times which makes good business sense!