Your first job should be to ensure that you recognize all of the purchases that show up.  Most banks only allow one month to address any discrepancies, and if you are prone to poor penmanship there is a greater chance of there being errors based on interpretation.

It is very helpful to the bookkeeping process if you separate your receipts and put the appropriate receipts with the appropriate statements.  When you save time for your bookkeeper, you also save yourself some money.

A primary function of the bookkeeping process is to ensure that the company bank account and credit card accounts are reconciled regularly.

If you are setting up accounting software in Edmonton here are a few things to think about:

Who will completing your data entry?
What accessibility do you want them to have?
What information do you want or need to track?
How do you anticipate your company to grow?

If you are looking after your data entry then you have no concerns. On the other hand, if you have administration staff who will be looking after this function you will want to consider exactly what information you want them to know. They will not need to know your bank balances and exactly how well (or not well) the company is doing.

When it comes to tracking specific information, how you set your accounts will make it easier to grab that info you need. Many people have a tendency to want to set up an account for everything. Do you really need to know the dollar value of paper clips purchased this year, or will a lump sum of office supplies give you what you need? Then again, if your industry uses a lot of paper, you might want a separate account for it to give you better info to be able to purchase bulk quantities with accuracy.

Setting up a chart of accounts also involves a little bit of forethought when predicting your company’s future. If you do not carry inventory now, is that a space you may look at down the line? Do you suspect that you will be making investments or looking for others to invest with you? Accounts can be created to accommodate these occurrences before they happen. It will reduce the chance of other people just coding transactions based on a guess because they didn’t know what to do.

Account reconciliations can be time consuming, but I guarantee that it is a lot easier if you complete them frequently.  The point of a reconciliation is matching information from 2 different sources.  The bank knows how much your service charges are and whether or not all of cheques you have deposited have cleared.  You on the other hand know what cheques you have written throughout the month that have not been deposited by the people they were written to.  It is balancing the information from both sources so that you have the same figures clearing for a period.

One of the challenges when you wait to complete reconciliations is trying to remember what the purchase was for, especially if the receipt has a product code without a description.

Most people have a decent recollection about where they spent money in the past couple of months. Anything more than a couple of months is a gamble for the memory. You can also write a description of your purchase on the back of your receipts.

Also, try not to use highlighter markers on your receipts – this tends to fade them or erase the ink making your purchase document unusable later on.

If you decide that you need help with these time consuming reconciliation tasks and you are in the Edmonton are, give us a call, we’ll be happy to support you or take over the process for you.