Bookkeeping Services – How To Be Successful Outsourcing Them
One of the most common ways that a business becomes a failure revolves around poor record keeping, or the lack thereof. Yet another is when profitability, that is, the relationship between the bank balance, predicted cash flow and actual cash flow, is not regularly kept in check.
How frustrating must it be when vital documentation cannot be found quickly when it is needed!
Read through the following “horror story”.
I was having a business meeting with a client. One of the directors mentioned, when prices were being discussed, that a credit note had been passed incorrectly. The director, determined to tabe the documentation, began a search which amazingly lasted over thirty minutes. In the end the search was only partly successful: she had managed to locate invoices from the suppliers as well as a monthly statement (both in different locations), but was unable to find the credit note or the last payment advice. This resulted in extreme embarrassment for her.
When I asked her if she had considered seeking the advice of an accountant to assist her with her bookkeeping and filing, she confessed that the system was her own and that she was more than aware of the disaster it had become.
The first thing I did, when I became the accountant for this business, was to throw out this horrendous filing system and install my own. My system places all documentation that relates to suppliers into the same file, according to the alphabetical order of the suppliers’ names. My client’s old system was a jumble of supplier’s invoices in one file, a second file containing credit notes, a third for payments, a fourth containing orders and goods received and the last dealt with queries. It was no wonder, then, why it was impossible to find papers in a quickly!
Any simple filing system should follow this structure:
Maintain separate files or file sets for the following:
- All registration papers as they relate to the business
- The minutes of every meeting
- Financial statements including formal and yearly
- All reports that are to be considered in decision making
- All Revenue Services registration papers and monthly/bi-monthly returns
- Industry Regulatory Authority papers
- Documents relating to Labour Relations and Unions
- Retirement Fund registration documentation and monthly returns
- Medical Aid registrations and monthly returns
- All Contracts
- Employee Letters of Appointment
- Salaries and Wages information
- An complete list of Suppliers / Creditors and their monthly reconciliations
- A complete list of Customers / Debtors and their monthly reconciliations
- Legal issues and Labour Disciplinary Hearings
- Separate files for Bank statements and reconciliations for each account
- Petty Cash book and reconciliations
- Any other separate or relevant group you may have in your business.
When you strictly adhere to this way of filing, it should help you to keep the books of the business in an organised manner and allow you to quickly access any documentation that may be required.
