Whether you’re a business that deals mostly online or whether you’re an enterprise that continues to do deals through the time-tested brick-and-mortar way, proper accounting practices should be an integral part of your business, and for several reasons.
First of all, accounting is an invaluable management tool, and should be handled the right way. Secondly, there are a lot of things to learn from history, and accounting is one way of keeping track. Thirdly, the government will require you to adhere to certain rules and regulations, and good accounting will allow you to reduce your taxes and increase your standing with the big brother out there.
If you want to do things the right way, you need a filing system that fits with your business – both for hard- and for soft-copies. Here’s how to create a good filing system for your business’ accounting records.
Draw a schema of your enterprise
Each business is different, so by mapping out a schema of how your business’ cashflow evolves, you’ll be able to pinpoint where the money comes from, how it moves from department to department, and how it leaves your enterprise. This will help you a lot in the classification of income and expenses and will lead to a better organisation of filing.
Think of the many categories you can classify things into. The two major ones are, of course, expenses (payable invoices) and income (receivable invoices), but you can subdivide those into several more categories for easy retrieval; vendor invoices, accounts payable, receivables from customers, and so on.
Be clear from the start
Colour coding will help you a lot – not just for recognising what kind of cashflow documents are stored in the particular folder or cabinet, but also regarding due times on payments and so on. It will also help you understand which expenses or income is related to what contract, and much more.
Have special folders ready
Special customers (large volume or regular customers) and customers or suppliers upon whom you depend regularly and need to pay on a regular basis should have folders designated for that particular purpose.
Each business is unique, and each enterprise will have its own way of doing things – that’s because each business is different, and because the people who work in the enterprise have their own preferences. There’s nothing wrong with that, on one condition: you need to be able to find what you are looking for very quickly, and you need to be organised in such a way that outsiders can still make sense of it. Find the way that fits your company best; it’s important for the organisation and it’s important for your efficiency. And if you truly want to be organised and up-to-date, you can always rely on the expertise of an accountant, such as the accountants central London from GSM & Co.
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