3 Weekly Accounting Habits to Install Right This Minute
It's rare to find anyone who really loves accounting. It's a task with many haters, as typically accounting tends to become top of mind only after it's way too late.
The key to avoiding this vicious confrontation is regular maintenance. Executing small, weekly accounting tasks will go miles in helping you steer clear of an epic battle with long-ignored financials because they won’t exist.
And since you’re presumably a young entrepreneur or you're aspiring to be one, you (hopefully) haven’t latched on to any bad habits yet. As such, here are three good ones that you can use weekly to help take the sting out of accounting:
1. Build a paper (er, digital) trail.
Every time you make a business purchase -- from meals and entertainment to office equipment -- snap a picture of the receipt with your tablet or smartphone. Better yet, use some simple cloud accounting software that has that feature built in. Then at the end of the week, when it’s time to reconcile business transactions, you’ll have some guidance that’s a little bit more reliable than your memory.
2. Be proactive.
Now that the week’s expenses are documented, you should take 10 minutes at the end of the week and reconcile your business transactions. Nowadays, that’s done via automatic bank import to whatever accounting software you’re using. The long-term value of the short-term task is that it’s much easier to reconcile a handful of transactions now rather than hundreds later. Simply put: don’t let things pile up.
3. Check your work.
Reviewing your aging accounts receivable and payables is a surefire way to get a quick glimpse of your cash flow. It’s critical to get current on what money should be coming in and what money should be going out. Spend 10 minutes at the beginning of the week -- as people tend to be more forward-thinking than at the end of the week -- getting a snapshot of what's coming in and going out.
There’s nothing worse than having to face a mountain of accounting tasks that cover months of time. So instead, tackle these little tasks on a weekly basis. You’ll be surprised at how much easier your business finances will be by dedicating just 30 minutes a week.
What other good accounting habits do you practice? Let us know with a comment.