Establishing Accounting Practices
Establishing Accounting Practices for Your Phoenix Business
What Is GAAP?
Generally accepted accounting principals (GAAP) are established by the Financial Accounting Standards Board (FASB) as required guidelines for publicly traded companies. Establishing clear and consistent methods of accounting ensures optimal transparency for all parties involved, from bookkeepers and tax preparers to decision makers at businesses. Businesses that follow GAAP maintain optimal accountability.
Two Choices: Accrual Versus Cash Basis
Use QuickBooks
- Invoicing clients
- Tracking upcoming bills and expenses (QuickBooks even has an app that can track employee mileage)
- Printing out a variety of vital statements, including profit and loss statement, balance sheets and cash flow statement
- Automating payroll
- Staying on top of inventory
- Make filing business taxes significantly easier
- Tracking receipts
Establishing Internal Controls
Accountability is hugely important when it comes to the bookkeeping and accounting best practices your business follows. The best way to avoid any potential fraud is to establish clear internal operational practices that everyone follows. For example, the employee responsible for inventory may write the check to vendors, another employee signs the payment authorization and your bookkeeper reconciles the business checking account each month.
Financial transactions that involve multiple touchpoints make it more difficult for employees or partners to steal money. Keeping physical receipts and checks for your records is another good way to ensure there’s always a paper trail if questions arise.
Should You Track Employee Time?
In task-based office jobs, tracking employee time can be particularly valuable. It allows a business to gauge performance, establish baselines for how long certain tasks should take and spot areas of improvement. It also enables those businesses to establish clear profitability expectations of certain services or positions.
Staying on Top of Accounts Payable and Accounts Receivable
Failing to meet your debt or invoice obligations can result in late fees or delayed shipments of supplies or inventory your business needs to operate. You can easily avoid those issues by simply making a habit or setting a schedule of checking accounts payable. Establishing a routine can ensure you’re never missing bills. These tasks can be further automated with your bookkeeper or through a platform like QuickBooks.
Business owners are understandably busy people, which is why it’s not unheard of that accounts receivable sometimes fall between the cracks. Unfortunately, if you ignore customers who owe you money, you may experience significant deficiencies in cash flow that could interfere with business operations.
Getting Professional Help Establishing Accounting Practices in Phoenix
H&H Accounting Services is dedicated to helping client businesses thrive. One of the ways we help our business accounting clients grow is by establishing reliable accounting practices.
The idiom that “knowledge is power” is especially true for business owners and decision makers. Proper accounting practices ensure you have complete transparency in your business so you can fully understand your strengths, weaknesses, opportunities and challenges. We ensure you have the data you need to make informed decisions.
Call us at (480) 561-5805 to get started.