Here are some practical tips you can implement today to help you WIN in your business!  If you can follow these five easy rules, you're ahead of the game compared to the vast majority of business managers and accountants.

The best bookkeepers (yes, that includes office managers, and DIY-bookkeeper-business owners!) reconcile the bank account in their accounting software every day to the online balance.   

Every day? Yep.

Do you have to reconcile it every day? No, the circumstances for every company are different.   

​The higher the transaction volume, and the more research your bank transactions need, then the more often you should be reconciling. For many companies every week is okay. But you shouldn't wait until the end of the month.

Think about the principles behind this:

- If you reconcile your bank account every day, you know your accounting system is always updated accurately through "yesterday." You only have to do the bookkeeping one day at a time, never a whole month at once.

- Your accounting system is always updated with the real available cash balance.

- Once you get to the end of the month, publishing financial statements very early in the next month is quick and easy.

- You don't spend time trying to figure out "what was that transaction from three weeks ago that hit the debit card?!?!"

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This idea makes many bookkeepers uneasy at first, because they're taught to reconcile to statements. So, YES, on the last day of the month, you should ALSO reconcile to the statement. Then you've complied with that accounting best practice as well.

The difference between a bookkeeper and a Controller is usually is: bookkeepers get 95% of the transactions right. Controllers have a system to identifying everything that isn't in its rightful home in the accounting software, and don't consider the situation closed until everything is accounted for properly.

To avoid messy books, don't allow your records to have those few transactions that need attention and are oh-so-easy to pass over every month.  

Continuity of operations... surviving to fight another day... should always be the top priority when resources are scarce and finite.

When a business doesn't have enough cash to pay everything that's due, the top priority is on anything that will grind operations to a halt if that payment doesn't get made. At most companies, that's payroll. Once a payroll is missed, a domino effect of problems gets set into motion (starting with: some of your employees might not come back to work!) that has the highest risk of ending with: Your business no longer operates.

So when you're analyzing your cash, and considering what you should pay with the dollars you have, always keep in mind the amount by which you'll clear your next payroll based on the assumptions you have today.

​Financial statements should either 1) validate the business owner's expectations about what he/she thought the numbers would say about this period, or 2) surprise and inform the business owner about the operations of the business through the numbers.  

In either situation, the context... the expectations of "what should I have expected each of these numbers to be?" is the key comparison to actual performance.

If a company spent $2,000 on office supplies this month, is that good or bad? It depends, right? The manager of the business would want to know:

- What did we expect we would spend?

- What do we typically spend on office supplies in a month?

- Are we growing or shrinking our spending on this expense over time?

Providing a profit & loss to the CEO that shows that we historically spend $1,000 - $1,500/mo on office supplies over the past year will be viewed very differently from one that shows we're averaging $3,000 - $5,000/mo, when the current month column shows that we spent $2,000 last period.

Providing all financial statements in the context of history significantly improves an understanding of the financial health of the business. Extra gold stars if the company creates a financial "plan" (a budget or forecast), and then provides a profit & loss statement that compares actual performance to plan on each line item.