Another year, another opportunity to improve your accounting habits! Bookkeeping often takes a backseat when you’re busy or stressed – and who isn’t, these days? But no one wants to spend their holiday season digging through piles of receipts or tracking down unpaid invoices. A fresh new year offers a clean slate to commit to better accounting procedures. By building good habits and implementing clear systems, you’ll be set up for success for many years to come.
1. Clean up your Chart of Accounts
We’ve said it before and we’ll say it again: A well-organized Chart of Accounts is the key to bookkeeping success. Your Chart of Accounts, or COA, is the foundation of your accounting system. These accounts determine how you categorize your financial transactions. Every organization has a unique Chart of Accounts, but we recommend following a few general guidelines to ensure that your COA is clean, organized, and easy to apply to a variety of financial situations. If your Chart of Accounts has grown too complicated or confusing, you may need consult an accountant to help restructure your COA.
2. Stick to a schedule
Schedules, calendars, and checklists – these are the best tools to keep your accounting on track. It’s so easy to procrastinate your bookkeeping when things get busy, but you’ll always regret it later. Keep a comprehensive checklist of your organization’s daily, weekly, monthly, quarterly, and annual tasks. For tasks with due dates – like charitable solicitation registration filings – create a master schedule and be vigilant about keeping it updated.
3. Make the Switch to Paperless A/P
While the pandemic drove many organizations into a virtual environment, some nonprofits still remain tied to checks, rubber stamps, pen-and-ink signatures, and other paper-based systems for Accounts Payable. The traditional way of paying bills allows little flexibility for remote working environments, and can lead to late fees and missed payments. Whether you’re concerned about maintaining internal controls for electronic payments or you’re just not sure how to mesh your current A/P procedures with a paperless world, the fact remains that electronic payments are faster, cheaper, and more efficient than checks. If your organization hasn’t switched to paperless A/P yet, the new year is a perfect time to explore your options.