Communicating the details of daily transactions with your bookkeeper isn’t just good practice, it is a necessity. Even the simplest of tasks can have a profound impact on the efficiency and accuracy of your financial records.
Ensuring Accuracy
Your bookkeeper relies on the information you provide to keep your financial records accurate. Without detailed transaction data, errors can lead to incorrect financial statements. Just adding a memo line description to checks can go a long way in providing needed information. If you enter the transactions in a general ledger, like QuickBooks, use the description and memo fields. This will show up in your register which then can be easily reviewed by your bookkeeper in between month-end reviews.
Timely Reports
Regular updates on your financial transactions enable your bookkeeper to produce timely financial reports, allowing you to review up-to-date data and manage cash flow effectively. A simple way to do this is with a receipt management application where transactions can be reviewed on a daily or weekly basis, not just at the end of the month – just remember to provide details in the description.
Streamline Communications
Effective communication with your bookkeeper hinges on the information you provide. When you consistently share transaction details, you foster a collaborative relationship that benefits your business. For most businesses, transaction activity repeats monthly so don’t wait for your bookkeeper to ask for information, upload it to their portal or document sharing application as soon as possible. Your bookkeeper can offer better advice and faster services when they have all the information and a clear picture of your financial activities.
Simplifying Tax Prep
Finally, tax season can be stressful, but it’s much smoother when your financial records are in order. By documenting and sharing the details of your daily transactions, you will be enabling monthly reviews, corrections and adjustments thereby reducing the amount of time needed at year end. When you send your financials to your accountant, they will appreciate the ease of preparing your taxes from accurate financial reports with documented details.
Your bookkeeper plays a crucial role in maintaining your business’s financial health, but they can only work with the information you provide. By fully documenting and promptly sharing information about daily transactions, you ensure accuracy, facilitate timely reporting, simplify tax preparation, and improve overall financial management. Remember, your bookkeeper isn’t a mind reader, or a magician, so timely communication will provide the foundation for effective bookkeeping.
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