I hate to state the obvious, but the COVID-19 pandemic has pushed most businesses into chaos. Business owners are faced with more financial uncertainty than ever before with Canada’s economy in a tailspin.
In times of crisis, business owners have to make quick decisions. Spending decisions and staffing decisions arise to the top of the decision-making pile. But how can business owners make sound financial decisions if their books are out of date?
What good is a financial report if it’s three months behind? Six months behind? A year? (Believe me, it’s common.)
A big question many might think is, “What is my lifeline? How many months can I stay afloat in the current circumstances?” Without knowing your income trends, recurring expenses, upcoming expenses, and account balances, how will you answer that question?
Here are some tips to keep your books up to date so you’ll have the right data at your fingertips at all times, not just in times of crisis.
Set aside 30 minutes twice per week
Bookkeeping takes longer than most business owners realize, especially if you have a lot of transactions. Set aside time at least twice per week to enter your income, expenses, and other transactions. Start with 30 minutes and increase or decrease as needed.
If you put the time into your schedule and honour it, you won’t fall behind.
Implement a system to capture all receipts
A notable time waster in bookkeeping is chasing receipts! To reduce this headache, create a system to capture all receipts. The system might look different in every organization, and that’s okay. The end goal is to find what is going to work best for you and your staff.
Here are a few tips to get you headed in the right direction:
- Capture all electronic bills and receipts in one email inbox. Send and receive all accounting-related messages from this account.
- Put a zip-able folder into company vehicles to capture on-the-go receipts. This prevents the receipts from being stuffed in the glove box, lost down the side of the seat, or forgotten in someone’s wallet.
- Take photos of receipts and upload them to one electronic folder like OneDrive, Dropbox, or Google Drive. The Canada Revenue Agency accepts photos of receipts, as long as the photos meet certain conditions.
Use online bookkeeping software
Gone are the days of desktop computer programs to do your bookkeeping work. The new way is using online bookkeeping software. That way, you can access you books from any computer, tablet, or mobile device you’re using at the time. You don’t have to wait to do the work on a specific computer with a license.
My favourite is QuickBooks Online because it’s the most robust. Some other options are FreshBooks, Zoho, and Wave.
Reconcile every month
The word “reconciliation” might scare some people off. But trust me – it’s simple. “Reconciling” basically means making sure your bookkeeping records match your bank records. You match each transaction and make sure each account balances at the end of the period. The process helps ensure your bookkeeping reports are accurate for that period.
Here’s a tutorial on YouTube that can get you started with reconciliations.
Hire a bookkeeper
If all else fails, it might be time to hire a professional bookkeeper. An experienced bookkeeper will have no problem getting your books up to date. An excellent bookkeeper will be able to help you implement systems in your bookkeeping processes.
You might need to hire a bookkeeper if:
- You can’t keep up with the entries
- You’re confused or face a barrier
- You don’t have up-to-date books
- You don’t like doing it
Accurate and up-to-date books are valuable in any business at any time – even if you’re not in a time of crisis and need to make fast decisions. But with these tips, I hope you’ll be prepared when 2020 throws its next curveball at us.
