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Bad Bookkeeping: A Nightmare That Never Ends
Halloween is almost here. Whatever your darkest fears may be, we bet that losing control of your finances is one of them. Bookkeeping can make the best of us howl furiously at the moon, but it’s essential to exorcise those demons if you want to stay on top of your records.
Left to gather dust, our finances can rapidly snowball into something horrific. As a cautionary tale to anyone who is guilty of bad bookkeeping, let us divulge some of the gory consequences that can arise when your records are neglected:
Muddled bank statements
Taking note of purchases, with corresponding bank statements to back them up, should be done as regularly as possible. Otherwise, you’ll get confused about what outgoings match the products or services you’ve bought. The longer you put off your bookkeeping, the harder it will be to reconcile your bank statements with your expenses.
Thankfully, software like FreeAgent can store your receipts in the cloud and complete your bank reconciliation with a single click of the mouse. So you can match up your purchases in minutes.
Money down the drain
Creating and sending invoices to the right people is hard enough. What’s even more destabilising is the pressure to chase outstanding invoices, just to keep your cash flow ticking over. Whether it’s intentional or not, some people do not pay by an agreed deadline. You’re letting them get away with financial murder if you don’t reign in overdue funds.
An occasional slip-up is understandable, but leaving bookkeeping in a state of ignorance is not. It’s your duty – or that of your bookkeeper – to get the cash you’re owed. If not, those tiny holes in your finances will widen and clients will assume they can be similarly off-the-ball with their payments.
Climbing a mountain for no reason
Your day-to-day workflow is probably a brew of meetings, phone calls, and demanding project work, so it’s inevitable that your books tend to suffer. When the world’s moving at the speed of light, it’s easy to forget about sitting down and concentrating on the boring stuff.
This tendency to treat bookkeeping as a homework assignment, delaying it for as long as possible, will only make the task more fiendish. Eventually, documentation will pile up to the point where it towers over your desk like a paper mountain, an Everest of dates and numbers.
Daily or weekly admin slots are much better. You can parse the load out, dealing with it in separate chunks. FreeAgent makes this approach manageable since you can log in on any device, whenever you steal a moment to update your records.
To secure your books from a gruesome end, get in touch to discuss our accountancy services. Halloween will soon be upon us, but there’s no need to scream your heart out at other matters; Bright Ideas is your guiding light to bookkeeping black magic…