Bookkeeping follows an accounting structure by recording debits and credits and making sure they always balance. Software, the most popular being QuickBooks, is utilized to simplify and potentially automate data entry, but not without limitations. Kudos to our mighty-tidy list of bookkeeping best practices to help bookkeepers achieve utmost perfection with their data entry.
Here are a few noteworthy best practice tips:
✅Complete main data fields, including the “payee,” and all relevant details are there for easy reference
⚖ Be consistent. Post recurring expenses to the same account each time
🧧Transactions are accurately classified. The account used reflects what the transaction was for and split, if necessary. For example, interest and principal on monthly loan payments
📚Limit your Chart of Accounts. Creating a separate account for each unique transaction blurs the accuracy of your financial data and reports
✍ When recording a journal entry use the memo to describe what this transaction is about so that anyone reviewing your records understands your rationale
🚚Capitalize fixed assets and expense small tools, supplies, and equipment that lasts less than one year or are of little cost
👩👦A parent account should not have transactions coded to it. Record transactions to sub-accounts
👀Review, review, and review. For instance, when done with bank reconciliation, go through the bank register for uncleared transactions that may be a duplicate
Adhering to these bookkeeping best practices will help ensure that your books and records are as accurate as possible. This mighty-tidy list neatly fits into your arsenal of best practice tips for bookkeeping.
Got more? Share in the comments to benefit our robust community of bookkeepers.