Accurate bookkeeping is the backbone of any successful business. It serves as one of the building blocks to regulatory compliance and accurate tax filing.
According to the Internal Revenue Service (IRS), many small businesses use inadequate bookkeeping methods. These businesses may face challenges during tax season, that include potential penalties, and difficulties in accurately reporting income and expenses.
At Fusion CPA, we understand the importance of precise financial records. Not only from a compliance perspective, but it also contributes to making informed decisions that aid in maximizing business profitability.
Our CPAs work with reliable accounting software to ensure adequate bookkeeping. One of the accounting software platforms that can streamline bookkeeping processes is QuickBooks Plus. In this article, we take a look at some of the features and tips to help you avoid costly errors within QuickBooks Plus.
5 Tips for accurate bookkeeping with QuickBooks Plus
Accurate bookkeeping serves as the foundation for financial transparency and informed decision-making within a business. It ensures that financial records are precise, allowing businesses to understand their financial health, optimize tax planning, and demonstrate credibility to stakeholders. These 5 tips can help you stay compliant within QuickBooks Plus.
1. Set up your chart of accounts correctly
A chart of accounts is the foundation of your bookkeeping system. Your chart of accounts should typically be aligned with relevant finance categories, such as revenue, expenses, assets, liabilities, and equity. But, it is important to take the time to customize it based on your specific business needs. It is recommended that you consult with a CPA to organize your chart of accounts accurately. This will allow you to easily track and classify transactions, making financial analysis and reporting more efficient.
2. Enter transactions timeously
Consistency is key when it comes to bookkeeping. Make it a habit to enter transactions in QuickBooks Plus regularly. This includes recording sales, expenses, invoices, and payments promptly. You can integrate your expense tracking and other software with QuickBooks Plus to minimize manual data recording, but maintaining up-to-date records is imperative to accurate financial reporting. Another useful tip is to make use of the Bank Feeds feature in QuickBooks Plus. This feature allows you to connect your bank and credit card accounts directly to QuickBooks, automatically importing transactions.
3. Reconcile all accounts
Regularly reconciling your bank and credit card accounts is an essential ingredient to accurate bookkeeping. Compare your records in QuickBooks Plus with your bank and credit card statements to identify any discrepancies or missing transactions. Account reconciliation ensures that your financial records reflect the actual cash flow of your business and helps identify any errors or fraudulent activities. Our CPAs do this on a monthly basis for our clients.
4. Monitor accounts receivable and accounts payable
Keeping track of outstanding invoices and bills is essential for maintaining accurate financial records. Regularly reconcile your accounts receivable and accounts payable in QuickBooks Plus to ensure that the balances reflect the actual amounts owed and owing. This practice helps identify any discrepancies and ensures timely collections and payments.
5. Regularly back up your data
Accurate accounting records are not possible without any data. Data loss can be catastrophic for your business’s financial compliance. Use the built-in backup feature within QuickBooks Plus to regularly back up your data and prevent any potential loss or corruption.
How your business can benefit from outsourced accounting services
Outsourcing bookkeeping can offer great relief to business owners who need to focus on their core strategic initiatives. By entrusting experts with tax and accounting responsibilities, businesses can leverage the expertise of professionals to understand ever-changing tax regulations and work to ensure compliance.
At Fusion our CPAs report having implemented controls for clients to reduce the risk of errors which can lead to penalties. They also report that over and above producing accurate books, the accounting software we use for our clients, gives these businesses real-time insights into financial data, which often enables informed decision-making.
Ultimately, outsourcing your accounting can help your business to streamline operations, enhance financial accuracy, and focus on growth and profitability.
At Fusion CPA, our experienced team can handle your bookkeeping needs, implement QuickBooks Plus effectively, and provide expert advice to help you optimize your financial processes.
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.