Messy Books No More: Top 3 Financials You Should Keep Track of Every Day

As Top Rated QuickBooks ProAdvisers, Peak Advisers LLC is frequently asked by business owners why their books do not provide meaningful financial information. Or, to say it another way: “Why are my books such a mess?”

In an earlier post we mentioned that meaningful financial information must be timely, reliable and consistent. Too often, failing to record or follow up on information in a timely manner is the primary reason the “books” don’t tell the story. In this post we identify the three processes that you should keep track of every day to keep your books reliable and consistent.

1.    Set up the bank and credit accounts in QuickBooks to download transactions from your bank and credit card company every day. Then, record or match these transactions that day. By doing so, you will always:

Know what your cash availability is;

Do a little bit of work every day instead of a lot of work at the end of a period;

Enjoy a quicker period-end bank reconciliation.

-> Bonus tip: Purchase an inexpensive scanning app for your smart phone. Then when paying pay by credit card, write the business purpose of the purchase on the receipt and scan the receipt immediately. Upload the scanned image to your cloud storage and throw the paper receipt away. Guess what? You won’t lose receipts, purchases are documented, receipts are filed and your accountants will be able to process transactions timely.

2.    Record vendor bills the same day they are received. Do not wait to catch up or record the expense when it is paid. For you to have timely financial information you MUST keep your books on an accrual basis and this means, among other things, that you record the liability when incurred — not when paid. 

-> Bonus tip: If you receive bills from vendors that you invoice to customers, set up QuickBooks to allow you to mark a vendor bill as billable and use items.  Doing this means you are starting the invoicing process while recording a vendor bill and as a result your invoices will be sent out timely.

3.    Look at Accounts Receivable and follow up on past due invoices every single day. Being diligent about being paid on time will improve cash flow significantly. 

-> Bonus tip: Make it easy for customers to pay you.  Enable credit card and ACH payments in QuickBooks.

If you look at these three processes every day you will have consistent and reliable financial information in a timely manner in order to make business decisions or provide to bankers and shareholders.