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What information does my bookkeeper need to be efficient and effective?

In reality, providing information your bookkeeper shouldn’t be difficult or time consuming.  A little planning goes a long way.

First, she will need access to your bank accounts.  If she isn’t a full charge bookkeeper, read only access is fine.  Read only access means she can see everything but she can make no changes.  This can be accomplished by creating a bookkeeper’s ID for your online banking, giving your bookkeeper your ID and password, or simply emailing her your bank statements every month.  I prefer the bookkeeper’s ID method.  You can restrict access and you can see when the account is being viewed.

Next, she needs access to your asset and liability information.  If you have loans or credit cards, she needs a way to access that information. Often that can be done online in the same or similar manner to bank accounts.  Statements will work here as well.  The value of your company’s assets should really be on the books and it is an area that many small businesses neglect.  If you were need to value your company tomorrow, this is very critical information.  You also need to decide how you will depreciate those assets — if you don’t know what depreciation is, your bookkeeper will be glad to explain it to you and why its useful.

A bookkeeper needs to know what kind of business entity you have, who owns it and much of it is owned by each person.  This will help her keep accurate records of the company’s equity accounts.

Finally, receipts, receipts, receipts.  This is especially true for those of you that use your business account for personal purchases.  With many of use rarely using checks anymore, receipts are that much more critical.  There are many electronic ways to keep receipts.  A receipt helps your bookkeeper know how to classify an expense and they are required for tax purposes.  Especially if you are writing off food, beverage or travel, you need to notate on each receipt who, what, where, when and why.  If a purchase is for a particular customer or job, notate that as well.  It helps with job costing.  The more data you give your bookkeeper, the more ways she can report it and help you find ways of cutting costs or managing your finances better.

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