Keep your Sanity and your Money with this One Simple Bookkeeping Mantra

simple accounting rules

Its amazing how complicated you can make bookkeeping if you try. Apply for a handful of credit cards, get two or three bank accounts, and carry arround a checkbook … and you’re on your way to a life of late payments and bounced checks.

There’s a better way. In fact, keeping your books straight in a small business should be as simple as “Just Say One.”
So next time you are asked…

  • How many bank accounts do you need? ONE. Last time I started a new business account at a bank, the bankers wanted me to have three new accounts: Checking, Savings, and Payroll. Why payroll needs its own account is beyond me. And savings? Forgettaboutit. There is simply no reason why a small business needs a savings account. Take the ONE checking account and leave well-enough alone.
  • How many employees should get a debit card? ONE: That’s you. And if you’re smart, you’ll lock it in a drawer and never use it. Debit cards pull cash from your account instantly, and that makes it too difficult to keep track of your balance. Start passing them out to the staff, and you will lose control of your account pretty quickly. That means unknown balances, which leads to bounced checks and much higher fees.
  • How many credit card accounts would you like? ONE. Assuming you have any credit at all, Visa, Mastercard and American Express have small business credit cards ready to send you. But each comes with a paper statement, a website, a password, a cash advance password, a credit limit, its own fees and payment date. Take any two, and you’ve got too much to keep track of. So keep your business expenses on ONE credit card so you know when the payment date is and can track everything in one place.
  • How many days a week do you write checks? ONE. Instead of paying every vendor immediately, tell them they have to wait. Why? Because you write checks on ONE day a week…or even ONE day each month if you can. When you group your payments like that, you can see exactly how much money you have, how much you need, and who can wait until next time. Bounced checks will be a distant memory when you are able to handle all your bills at once.
  • How many people have check writing authority? ONE. Actually, I suggest that you delegate this one thing to someone else. Find a finance consultant or a full-charge bookkeeper to write your checks. But do not delegate check signing authority. Make the bookkeeper bring all the checks back to you for review and signature. Since you’ll be doing checks on just one day a week, this will only take a moment of your time, and you’ll be able to quickly spot duplicates, mistakes, and missing payments.

Too many entrepreneurs run their small businesses like giant enterprises. Sure, IBM and Microsoft have more than one checking account — but they also have armies of accountants. Until you build a finance department of your own, stick to tools that make bookkeeping simple.

And next time a banker or employee tries to make your accounting more complex? There’s really only ONE answer.

Dedicated to Your (Simple) Profits, David

PS: Please Tweet, Link, or “+1” this post so others can benefit from this important lesson. Thanks!


6 Comments
  1. Dear David,
    “SIMPLE” Thank’s, am awake for the rest of the week, seeing. the word, I hated bookkeeping numbers,especial when it is kind of a strange language, invented for and by bookkeepers (their highest art, present present one with a consolidation from the results of x companies in x different companies) ! ! !
    I am looking forward to your weekly news letter. Keep it going.
    Thanks
    Louis

    • Thanks Louis!
      You work hard to make the money, but you shouldn’t have to work hard to keep track of it. Its crazy how complicated a banker or accountant can make your life if you let them.
      Wishing you much (simple) success! David

Leave a Reply


Contact Us Today

Discover the benefits of having a a team of financial experts working for your business at a fraction of the cost of staffing internally! Get a free business assessment by contacting us using the form at the right.

Or just pick up the phone...

(980)-819-0510
or (704)-614-2701

FUSE FINANCIAL PARTNERS, LLC
5550 77 Center Drive #310
Charlotte, NC 28217
United State

David, Steve and Mac are looking forward to speaking with you!