It is essential to ensure that your business is fully compliant with the law. Making sure your business runs in accordance with all the laws, regulations, and governance, while also keeping your business activity secure, can be a time-consuming and difficult task.
Once you have established these, you’ll be able to monitor the financial health of your business which can lead to better corporate decisions and faster business growth. Having clear bookkeeping practices also ensures that regardless of the employee holding the position, he or she will be guided on how to manage the business’ finances. However, creating bookkeeping practices just for the sake of having one, is not enough. If you want these bookkeeping practices to become beneficial for your business, you should ensure that everything in the process is organized.
A business bookkeeping involves a lot of documents. Normally, you will have to store income tax records, journals, ledgers and financial statements, just to name a few. Usually, businesses will have several copies of these documents in a year. This means that the longer the business operations, the more the documents the business must comply with. Business must ensure all files and documents are kept safe and maintained properly as at any time in future those documents can be used to attract investors or to raise loans from banks.
So here are some helpful tips we’ve put together to learn the best ways to keep your books organized to ensure your business is compliant.
Keep track of all Business Transactions –
Regardless of how well-funded your business is, you can still run out of money during the early months of operations. This is especially true if you don’t track your business transactions. If you want to steer away from this direction, always take note of the money that enters or leaves the business. If possible, keep track of these transactions as soon as they are made. Don’t wait for weeks or months to record these. When you have real-time updates of your business transactions, it’ll be easy for you to reconcile your finances at the end of the year. These business transactions can be used in your own internal financial management.
Using a Cloud-Based Software –
These days, keeping your business bookkeeping more organized can be achieved once you use cloud-based software. This software can do several bookkeeping tasks at the same time while ensuring that all your documents are stored in one place. Additionally, cloud-based accounting software can save your business time and money since everything will be automated and more precise. By incorporating cloud-based software, you can back up or upload all our documents to cloud to ensure none of the documents are lost or misplaced.
Organize your Paperwork and Digitize –
As mentioned, bookkeeping will require you to store a lot of documents. However, piling all your ledgers and financial statements in one folder isn’t the way to go. Having an organized business bookkeeping means that you should follow a system in storing your documents. If you’re keeping hard copies of your financial documents, compile them in one file each month or year. If you want to have backup copies, scan your documents and store it electronically. These copies will be safe from any worst-case scenario. As financial documents can be used for filing VAT, it is essential that all the documents are kept safe and maintained properly.
Perform Regular Audits –
Regularly checking up on your accounts, documents and data can help keep your business files be fully compliant. Keeping track of a file’s history means making sure all changes are recorded, including who has made any edits and when. By maintaining documents correctly, you can make sure your business stays audit compliant because during audits the compliance consultant must make sure if all the required documents are all accounted for.
Many businesses are required to conduct compliance reviews on at least an annual basis, including a review of internal systems. Done well, regular auditing can provide you with self-assurance that you are complying with regulations and statutory obligations on a regular basis while highlighting any potential problems or areas to improve.
Encrypt & Back-Up your Files –
Protecting any information or data which your business may have is crucial, both to avoid any potentially embarrassing and reputation-tarnishing mishaps with client data and to ensure you are compliant when it comes to security.
In order to keep any information, data, digital files, and documents safe, you need to ensure they are protected with a suitable level of security. Restricting documents to only those who need to see them is also a good way to minimize the risk of information getting into the hands of the wrong people. It is also important to back up your files and data somewhere safe so that if there is any breach in security or disoriented it can be still accessible and retrievable.
