KISS (Keep It Simple, Stupid) – Have a simple system – think about processes to simplify each job. Create a Procedures Manual and have all staff follow relevant procedures. This ensures consistency.
RECONCILE – Always reconcile creditor and bank statements. It is important you are confident that you agree with what your creditors say you owe them. Balancing your bank statement ensures you don’t miss any transactions and all GST is claimed. Don’t forget your personal accounts used for business purchases.
FILING – Keep all your accounts information in ONE place. File documents as soon as possible and keep unpaid and paid invoices seperate.
CONFIDENTIALITY – Restrict access to your information. Password protect sensitive information and keep employee records in a locked filing cabinet. Privacy laws encompass access to personal information and it is your responsibility to ensure that your employee data is kept confidential.
RECEIVABLES – Keep your debtors in check. Review outstanding invoices weekly. Have standardised letters/emails to send to overdue debtors. Don’t be afraid to ask for payment.
ACCOUNTANT – Find a pro-active accountant who can work together with your bookkeeper to guide your business and assist you to get the best possible financial advice and support.
MANAGEMENT REPORTS – Learn to read and understand your management reports. These are the tools that indicate the health of your business. Understanding your P&L and Balance Sheet figures will allow you to keep track of business flow.
CREDIT – Don’t give credit unless you absolutely HAVE to. If you have to then restrict the credit limit to an amount you are willing to lose as signed credit applications will not guarantee you payment.
SPREAD DEBTORS – Never have more than 35% of your business with a single client, as losing this client could close your business.
BOOKKEEPER – Know your bookkeepers responsibilities and understand what they are doing. Get them to give you a 5min summary of what they have done at the end of each visit.