Proper use of your accounting systems requires the system to be set-up properly. Set-up is a little different for each kind of business.

Set-up starts with having a chart of accounts that is designed for your business. The kinds of revenue and expenses that a dentist’s office will have are different than those of a plumbing contractor or that of a restaurant.

Once your system is set-up you need to use it properly, and make sure the date / information you enter is accurate and up to date. For example: recording sales, payments received and expenses paid by check, ACH of credit card then verifying bank and credit card information by reconciling them to the information you entered. Importing information directly form your bank or credit card means giving up the verification process, and often leaves holes in your systems, as to who was paid and what they were paid for. The IRS will require you to provide more than just a bank transaction code and bank or credit card statement. You also need to make provisions for holding on to receipts and invoices, as well as a way to track them back to your accounting systems and bank or credit card statements.

Use the data your accounting systems provides you a way to see how your doing plan, make business changes based on facts not supposition, be prepared for cash demands and do tax planning.