New Year’s resolutions are once again upon us. Time to think about all the wonderful things 2020 will bring: a better diet, a more consistent gym routine, tackling that mess in the garage. This is also a good time of year to evaluate financial habits, both for individuals and for businesses.
As the year winds down Ferguson Timar works with business clients to look forward as well as back. The 2019 income tax season is just around the corner, and getting started early is important. At the same time, the new year offers an opportunity to draw lessons from the previous one. These lessons can be used to craft a robust bookkeeping plan for 2020.
Here are some “big picture” tips from the bookkeeping pros at Ferguson Timar as we head into a fresh year:
- Look for a better process.
Bookkeeping is a discipline that spans across an entire business. Properly executed, it has daily, weekly, monthly, and quarterly tasks. Daily tasks, like recording day-to-day transactions, are the foundation of effective bookkeeping. But weekly reports to capture the current condition of the business’s accounts payable, accounts receivable, and cash flow are essential for managers to understand whether they are on track. Likewise are monthly processes to bring another layer of analysis to the table.
Each of these tasks can take significant amount of time and be prone to error—unless they are reduced to a clear, documented set of bookkeeping processes. By installing best practices or working with an outside firm, a business can get control of its bookkeeping and save money.
- Learn from past mistakes.
Many businesses that handle their bookkeeping in-house make mistakes. Sometimes those mistakes get caught before they cause serious problems, like errors in tax filings or misrepresentations to a lender, but other times the errors slip by. Other mistakes aren’t a question of detail but of procedure. Perhaps the bookkeeping function is handled by people who don’t enjoy it, or who take a long time doing it when they could be doing other, more value-added work instead.
By taking the time to review and reset a business’s bookkeeping practices, lessons from past mistakes can be integrated into the business’s ongoing procedures.
- Anticipate change.
Any business that wants to grow in 2020 will need to think about how that growth will affect its bookkeeping requirements. Whether the goal is to expand into new markets, hire new employees, raise fresh capital, or sell the business, robust financial records are essential for making informed choices and giving key stakeholders accurate information. Put the right bookkeeping system in place now, before change forces a rushed adoption of new practices.
Ferguson Timar provides complete bookkeeping services to businesses and high net worth individuals. We’re excited to give clients the support they need heading into 2020. If you have questions about how you can prepare for the coming year, call us today at (714) 204-0100 or reach out through our contact page. We wish you and your family a very happy New Year!