Keeping your company's accounting managed and orderly allows you to monitor its financial health at all times and helps you make strategic decisions. And to ensure all this, accountants play a vital role.
The work of an accountant, whether internal or external, includes more than crunching numbers or doing financial data entry.
Their role in recording income and expenses, estimating the value of assets and liabilities, determining costs and the level of profitability of the business, as well as evaluating its financial risks and how to compensate them, can determine the success or failure of your company.
Benefits of an orderly accounting
Having your accounts in order offers your business the following benefits:
- It provides in-depth information of your company's economic and financial condition;
- It assists in predicting financial risks and facilitating financial planning; and
- It gives a better grasp of expenditures and expenses.
- It optimizes the use of resources to improve profitability.
- Facilitates tax planning and helps reduce the tax burden.
- It allows the evaluation of the appropriate level of indebtedness for the business.
How to do it?
In order to maintain accounting records diligently, it is vital to hire the right accountant, one who has a strategic vision for the future. Still, it is also required to make the relevant documents and technology resources available to them and ensure the correctness of the registers.
Here are a few pointers on how to keep your accounting records in good shape.
Digitize accounting operations: The issuance of electronic invoices is already an obligation in Mexico. This has forced companies to acquire software that, in addition to this function, also helps reduce errors in data entry, accurately record and evaluate income and expenses, estimate costs, etc.
Assemble documents by type: Order requires structure, so establishing categories of documents and then filing them manually or electronically will ensure that you always have the vouchers you need on hand and that none are left unaccounted for.
File the invoices issued in sequential order: Each invoice has a number, and registering them in that order, whether they are valid or canceled, serves to better control income. If your business does not issue invoices but only purchase tickets, it is essential to record and file the daily cash outages and the reports issued by the cash registers.
Check that the information matches: Whether it is in the form of invoices or cash receipts, all records must match the money entered into the company's accounts. Therefore, checking it periodically will help detect errors early and facilitate tax filing at the end of each tax period. Verify the balances in bank accounts to confirm the deposits and make sure that the exits are justified. Likewise, keep track of the checks issued and the electronic transfers made.
Record all transactions: Keep a timely record of all acquisitions and petty cash management to control expenses. Record debts promptly and verify their payment on time. Manage the company's payroll, record payments for all remuneration concepts, and make the applicable tax withholdings on time.
Avoid illegitimate invoices: Register in the accounting only those invoices that are issued in the name of the company. A common mistake is desire to include vouchers in the name of the owners, partners, or employees, but this can lead to cumbersome and costly tax problems.
Set up security checks and restrict access: Duly safeguard the income and expense books so that only authorized persons can have access to them.
Take assistance from the experts: Hire a good accountant or seek a reliable accounting service company that always complies with your tax obligations on time and has the information that allows you to carry out effective strategic planning at all times.
Conclusion
An orderly accounting will allow timely and informed financial decisions that will help the excellent use of resources and enhance the profitability of your business. And as your business begins to grow, you might want to think about investing in hiring a competent accounting service company as it can easily overshadow your in-house team in terms of both price competitiveness and productivity.
Don’t know which accounting service company to go with? Let us make things seamless for you. At Cogneesol, we are a team of professional and experienced accountants providing top-quality virtual accounting services to clients worldwide. To learn about our services and pricing in detail, talk to one of our experts today. Call us at +1 646-688-2821 or send your queries to info@cogneesol.com
Also Read: How Optimizing Accounts Receivable Turnover Can Empower Your Business
