Bookkeeping is the process of recording the transactions ie. the ins and outs of your business. Great books – those that are accurate and complete bookkeeping provide better decision making for your business. The vast majority of your bookkeeping bill comes from Volume, Complexity and Errors all of which can be reduced to save money on your next bill.
- Number of transactions – the more transactions in your books, the more work we have to do. Of course, we all want our business to grow and lots of transactions usually mean a healthy business. However, tapping for personal items and small purchases can add up to a lot of work.
Hint: Use accounting software that provides bank feeds and AI to eliminate data entry. Try to keep the books as clean as possible.
- Multiple Accounts – When clients use multiple bank and credit card accounts their bookkeeping quickly escalated. Many transfers between business accounts quickly double the required entries each month, which take extra time to enter if some of the transactions especially if payments are made from personal accounts.
Hint: Multiple accounts are a great tool for a growing business but not the use of personal accounts.
- Multiple Systems – the use of field/dispatch software, CRMs and external applications to invoice create reconciling items between systems.
Hint: Look for systems that will sync to your accounting software.
- Payment errors – to an accountant, a $0.01 error and $1,000 error are the same.
Hint: Make sure your staff are trained adequately trained to recognize payment errors and provide feedback in errors are ongoing.
- CRA Accounts – Late filing and late penalties. Clients who don’t file on time incur late filing penalties. Businesses that do not pay on time will incur interest. Both these penalties and interest are not tax-deductible and need to be recorded separately.
Hint: Paying your taxes on time and ensuring filings are completed before the deadline will help reduce additional bookkeeping related to the CRA amounts owing.
- Misapplied payments. CRA accounts for payments by tax program (income, sales, payroll) and also by year so it’s important to get it right so payments are applied correctly and your liability is correct.
Hint: Ask your bookkeeper to guide you on tax instalments.
- Missing Transaction Details – Missing details are the most common type of issue bookkeepers run into managing clients books.
Hint: Complete your bookkeeping monthly to quickly identify missing items.
- Etransfers are particularity troublesome – bank statements don’t usually have the recipient’s name. In most cases, you’ll also need an invoice to back up your claim and claim HST input tax credits.
Hint: Use direct deposit, when possible, cheques when you can’t. Epay and Plooto offer electronic payment methods that have way better tracking than etransfers. Ask for invoices from all of your vendors.
- Slow Responses – When client responses to questions are timely, bookkeepers have the client’s details fresh in their mind and can quickly make any needed changes to the books. When the bookkeepers need to chase down clients for details, this takes extra time. As your response time increases, the more details that will need to be refreshed so the bookkeeper can finish updating the books.
Hint: Providing quick responses to your bookkeeper can help keep their work flowing, and your costs lower.
Volume, complexity and errors can add substantial costs to your bookkeeping bill. Businesses are always seeking the better, faster, cheaper solution but consider changes you can make to save money in the long run. We’re ready to help you get the most out of your bookkeeping. Set a meeting and let’s talk about how we can save you money.