What are some of the most important accounting practices for local bookkeeping firms to be sure they’re using when handling customer ledgers? Many first-time business owners are unfamiliar with the difference between bookkeeping and accounting. It would be easy to assume that they’re different names for the same thing. After all, they’re both about keeping track of the company’s money, right? The fact is, though, that they do have significant differences. Bookkeeping is primarily concerned with accurately recording financial transactions. Accounting has to do with how to interpret those records. Naturally, there can be a bit of overlap. As long as your bookkeeping team stays on top of them, you can feel confident that your business is in good hands.
1: Daily Cash Statement Reviews
Few things car cripple a business more effectively than running out of cash. Without cash, you can’t continue to operate in any meaningful way. The longer such a crisis continues, the less likely it is that you’ll be able to reopen the doors.
That’s gloomy, but it’s important. To prevent a cash nightmare from happening, you need to know how much you have on hand every day. This is more complicated than it might seem, unless your bookkeeping team is doing its job right. Cash can be tied up across multiple accounts, so you need a simple system that brings all of the data to one spot you can see at any time.
SyncLedgers makes it easy because we build custom software dashboards for our clients so they can see exactly where their money is whenever they need to. This matters because by checking your cash levels every day, you can see exactly how much room your business has to move and grow by investing it. Of all the most essential accounting practices for local bookkeeping, this is the one that generates the most basic peace of mind.
2: Weekly Cash Flow Projections
Knowing how much cash you have now is only half the battle, though. What about tomorrow? Can you afford to wait from day to day to know what’s left? Of course not. You need to have projections that give you a sense of what’s to come so you can plan ahead.
Weekly cash flow projections are one of many helpful ways to accomplish that. These reports draw in data regarding debts and invoices that need to be paid, as well as income you can expect to receive. With that kind of information on hand, It’s much easier to make daily decisions about whether and how much to spend on new tools or hiring opportunities, or anything else that could impact a company’s cash holdings.
3: Monthly Balance Statement Reviews
Beyond the daily decision-making, it’s essential to keep tabs on the progress and financial health of the company from month to month. Reviewing the balance sheets is one of the clearest ways of accomplishing this.
By verifying that the company’s assets do indeed equal the sum of its equities and liabilities, and that it has an appropriate leverage ratio for your industry, you can know that the company is in a safe position. Further, you can enjoy watching the company’s month-to-month growth progress.
Getting Essential Accounting Practices for Local Bookkeeping in Your Corner
These are not the accounting practices for local bookkeeping staff to use that will make a difference for a company. There are hundreds of additional ways that the principles of accounting can be brought to bear in the profession of bookkeeping. At SyncLedgers, we insist on providing the very best sort of bookkeeping for our clients, That includes providing useful data in the right ways and at the right moments to satisfy each client’s needs. If you’re looking for a strong local bookkeeping partner, be sure to reach out to us today!