Now that the tax filing deadline has passed, this is the perfect time to do some “spring cleaning” to make sure your accounting records and finances are in good order. Start by asking yourself these questions:
1.) Are you in the cloud? Being able to access your accounting records anytime, anywhere and from any device lets you make immediate decisions with real-time data. Being in the cloud also allows instant collaboration with your accountant so that you both can see exactly where you stand financially at any moment.
2.) Do your banking transactions and credit card transactions automatically feed into your accounting system? Taking advantage of automated imports of transactions is a real time-saver. It also cuts down on the possibility of human input error. Importing credit card charges allows you to detail each charge by vendor, amount and date. This gives you so much more information than posting your entire monthly credit card bill to “office expense” with the description of “Visa.”
3.) Are all the prior-year adjusting journal entries posted? Often, in the course of preparing your tax return, your accountant will make some adjustments. Make sure these adjustments get posted to your accounting system so that the current year will show the correct opening balances and the prior-year amounts will agree with your filed tax return. If you are in the cloud, your accountant will be able to easily post these adjustments directly to your system.
4.) Do you have any duplicate or unused accounts in your chart of accounts? These should be merged or marked as inactive (depending upon the capabilities of your software) so that no current transactions accidentally get posted to old accounts. This may also help to eliminate some of the reclassifying journal entries your accountant may have to make.
5.) Are your reports detailed enough? Being able to produce reports by product line, location, division or salesperson can help you make more informed decisions. Make sure your accounting system allows these types of classifications and that you set everything up properly to take full advantage of the reporting features available.
If you think your accounting records need some overhaul or improvement, the summer is the perfect time to talk to your accountant. There is plenty of time to make small changes or to convert to a more suitable accounting system before we have to start thinking about taxes again.
Julie Strohlein, CPA, is manager of Alloy Silverstein in Cherry Hill, JStrohlein@AlloySilverstein.com.
Published (and copyrighted) in South Jersey Biz, Volume 7, Issue 5 (May, 2017).
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