Just recently I had an opportunity to look into detail of an accounting system. Not software, but the actual system when it comes to managing paperworks, invoices, bank extracts etc. There was a system and I was assured I would be able to find everything I needed with one specific number. Needless to say I was happy imagining I would only need an hour for the job in hand. Continue reading
Category Archives: 3.4 Regular Control Procedures
What should I do when there’s a balance that’s very small but I don’t know what it relates to anymore?
Balances such some “leftovers” on prepayment accounts for an example or some accruals may at a certain point remain as such that you don’t know what’s behind them no longer.
They’re remains of entries once made and usually relate to either rounding up or down or some currency differences for an example. Be the reasons what they are however, what you should do, is get rid of them at some point to have the accounts accurate. Continue reading
Importance of order in your accounting and accounting records
Say you’re making your accounting entries daily, once in a few days or more irregular and over a longer period of time. Regardless and even more so, the less often you make the entries; make sure you’ve got one thing always happening.
Always have an order in performing the entries, accounting for them. What I mean by “order” is the following: Continue reading
Inspection of physical assets
The same as you count your inventory; you should also count your fixed assets. I know it may seem odd, they are all there you may say and you can see them, but imagine if you have assets all around your premises and some even in the custody of your employees. How would you then ensure they are all there? Continue reading
If you get services – make sure you’ve got an agreement in place
You get services from someone and you pay them for it. You have a mutual understanding you once agreed in word and it worked out wonderful. You get what you need and your provider gets paid for it. No harm done. Continue reading
Subaccounts – what you need to know about them?
You may find yourself using subaccounts in your accounting – for an example, all goods coming to stock are first accounted for using a specific account still under inventories and there’s the opposing entry that’s also under inventories decreasing inventories at the same time. You’d use this entry until you haven’t yet received the invoice, the invoice is being confirmed or you’re checking the quality etc. and don’t want to show the purchase as a part of your inventory yet. Continue reading
Repetitive entries
In accounting some entries are repetitive – either by their nature, i.e. sales invoices coming in multiple times per day for an example, or by their function, i.e. prepaid expenses charged into expenses in their proper period on regular basis.
There’s nothing wrong with having repetitive entries, but as always there are a few things we’d like to point out which you should keep in mind when dealing with them. Generally speaking, when something is repetitive, it’s potentially attracting errors or an oversight in its essence. Continue reading