I thought I would put together a list of what I consider to be best bookkeeping practices. These come from many years of experience. Some of these I have learned from others and some I have learned by constantly looking for better ways to operate as a bookkeeper.
Keep a monthly checklist
This is a reminder of tasks that are to be repeated each month. I use Evernote and keep check boxes next to each one so I can check them off as they are completed. The more clients I have the more important these have become. The checklist can include:
- Requesting monthly bank and credit card statements
- Making monthly recurring adjusting journal entries
- Filing state B&O excise tax returns
- Filing payroll tax returns
- Scheduling payroll tax deposits
Reconcile all accounts
- checking and savings accounts
- petty cash/cash on hand accounts
- clearing account
- short and long term liability accounts
- all account receivable accounts including employee accounts receivable
- payroll liability accounts
- tax payable accounts
- all liability accounts – vendor statements
Don’t guess
Send a list to clients each month of items you need help classifying. You may have a receipt but not know for what purpose the money was spent.
Keep in touch with your client’s CPA
Stay in contact with your client’s CPA or tax preparer. It is a good idea to contact them during the last quarter of the year to have them do a review of the books. This of course can only be done with your client’s permission. A CPA might want to see the books early to be sure there won’t be any surprises come tax time. This might mean adjusting an owner salary based on actual income versus estimated income earlier in the year. A CPA can be a big help in keeping the books in the best way possible for your client.
Keep in touch with your client
Stay in contact with your client. You may find that email and texting work well for you and your client. If so, that is a good thing because you can stay in constant contact. Phone calls are also very important. As bookkeepers, we do most of our work alone at a computer and may find phone calls to be an interruption. I personally enjoy speaking with my customers over the phone. Most of them have become friends over the years and I have found that it is more personable and helps to let your clients know you are on the same page with them and their business.
Keep document backups
Keep backups of all important documents such as payroll tax filings and paystubs. Be sure your offsite backup solution is secure and that is uses encryption when syncing files.
Keep software backups
Keep backups of your bookkeeping software company files if you are using desktop software such as QuickBooks. These backups should be remote and not kept on the same computer as the software. In the event of a hard drive failure or computer virus (both of which I have experienced) you can at least rest assured that your clients important financial information is intact. If you aren’t sure how important this is, just imagine having to do all of the work again that you did to create the files in the first place! Be sure your offsite backup solution is secure at that is uses encryption when syncing files.
Send monthly financial statements
Send a Balance Sheet and Profit & Loss (Income) statement to your clients each month. Be sure you review them first. That way you can correct any of your own mistakes before sending them on to your client.
Your client knows their business best and they might notice something that needs correcting in the bookkeeping. Also they might see something that is wrong in their business early before it becomes a bigger problem, such as as overbilling by a vendor.
Keep archives of all client emails.
This is really helpful when trying to resolve communication issues. You will have a record of what was written by you and your client. It is a good idea to go through these first before working to resolve communication issues. I have also found that I can avoiding asking a client the same question twice by checking to see if I have already asked it before and simply forgot. If used well, email can be an excellent bookkeeping business tool.
Get things done early
Get these done as soon as possible. It is better to get things done in the first part of the month. As you get nearer the end of the month, there are more due dates for things such as tax filings. If you have the bookkeeping done and have received all information you need from your client you will be better prepared to get things filed on time.
Get certified
Get certified for the software you are using such as Xero or QuickBooks Online. Sometimes there is a better way to do something and you may discover this by getting certified.Ask for help. If you are unsure how best to do something whether it be with software or the actual bookkeeping process, it is good to get help from others either online or local, such as a CPA you know.
Keep notes
Apps such as Evernote are a good place to keep notes for each of your clients. I use it to keep my checklist of monthly tasks. You can also use it to keep important notes from communications with your clients. I keep it handy so that when a client calls, I can open a new note and begin typing right away. I do this so that I won’t forget any details of what they have said or requested of me or what needs to be done.
Be detailed
Being detailed in your work and in your notes saves you time later when questions come up about how something was done. For example, take advantage of the memo lines within transactions in your software.