Organizing your Bookkeeping Filing System

One of the services offered by My Essential Office Assistant is general bookkeeping. Our services are provided to assist you with keeping up with your bill payments, invoicing, and monitoring/tracking your revenues. When you want to set up and maintain a filing system that works for you and your virtual assistant, you need to decide on a system that is easy to use, especially for filing and retrieving information.

It is the law that every business owner must keep a complete and organized set of books and financial records. If you don’t have supporting documentation for the financial activities of your business, you’re in for a lot of problems especially regarding sales taxes and in the event your business is audited. It is extremely important to keep up with maintaining your financial records and keep your financial records organized to avoid any major problems.

1. Set up a filing system for each month of the year to put your financial documentation in each time you receive an invoice and pay a bill or purchase something by cash, debit or credit card and each time you issue an invoice to your customers and receive payments. You can use file folders or envelopes.

2. On a daily basis, each time you pay a bill or purchase something for your business, arrange all your receipts and invoices in chronological order. Note on the receipts and invoices the vendor company name and type of expense each transaction is, especially if the transaction is shown on the bank statement as ‘Interac payment’ or ‘email transfer’ if you pay by debit or pre-authorized payment from your business bank account.

3. Keep cash or debit purchase receipts separate from your credit card purchases. When you receive your bank statement and your credit card statement, match up the receipts and invoices to the transactions listed on statements for your business bank account and credit card.

4. Check off the transactions on the statements to confirm that you have receipts and invoices with confirmation of payment to match them. Make sure the payees or vendors who receive your payments and customers from whom you have received payment for your services or products are clearly identified for each transaction on the bank statements. Make a note of bank deposits that include payment from more than one customer; indicate the names of the customers, the amounts they paid and for what invoice.

5. Keep in mind that some bills you receive at the end of the month may not appear on your statement until the following month depending on when you pay the balance owing. For example, if your telephone bill was issued in May but the amount owing on the bill was not paid until the first week in June, attach it to the statement for the month of June during which the bill was paid; not when the bill was issued.

6. If you find a discrepancy, i.e. a transaction that is listed on your statement for a purchase for which you don’t have a receipt or invoice, call your bank to check and verify who the vendor is. Occasionally a vendor name will be shown differently from what is shown on the receipt. After speaking to a customer service representative at your bank, if you still don’t recognize the vendor name, the bank will investigate further. If the transaction for an unknown vendor is shown on your credit card statement, the bank will, in all probability, cancel your credit card and issue you a new credit card. Advise your bookkeeper when you receive the new credit card so that he/she will know.

Once you have received all bank statements and matched up the invoices and receipts with the transactions on the statements, you can submit them to your bookkeeper.

1. In order for the bookkeeping electronic file to contain complete and accurate information, you must have bank statements for at least one (1) business bank account and at least one (1) business credit card with all respective invoices and receipts attached and matched in the order that the transactions appear on the statements.

2. In order for your bookkeeper to set up a company file according to accounting Generally Accepted Accounting Practices in an accounting software application, the closing balance of the last bank statements for your business bank account and business credit card will be required for the end of the fiscal year of your business. Remember that these particular accounts are required in order to record the financial activity of your business; therefore it is highly unlikely that your accountant will need you to include your personal bank account and personal credit card account.

3. Always have your bookkeeping done on a monthly basis; never leave bookkeeping for the whole year to be done all at once at the end of the year. This will ensure your financial records are up to date and you will always know what the financial status of your business is at the end of each month. This will also ensure that your GST/HST remissions and payroll remissions records are up-to-date. At the end of the year when your accountant is preparing an income tax return for your business, you will not have to search for information and you will not have to worry about whether or not any information is missing which will affect the accuracy of the electronic accounting file.

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