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Bookkeeping Tips
Bookkeeping Tips
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Carrie Poppelaars
CEO of Local Ledgers LLC & Community Manager
If you spend > than $2500 on a computer
or another piece of equipment
for your business it needs to be
classified as an asset as opposed
to an expense. An asset needs to be
"expensed" over a period of time,
in this case 3 years. This asset will sit on your
Balance sheet for 3 years until it is fully
depreciated.

Looking at a couple similar scenarios, may help:

Scenario 1: You buy a computer for $3000. You will record the computer as an asset and record an expense of $1000 per year for 3 years.

Scenario 2: You buy a computer for $2100, you will record the entire $2100 as "Computer Expense" at the time of purchase.
Carrie Poppelaars
CEO of Local Ledgers LLC & Community Manager
Here are some warning signs that your
books or bookkeeping may not accurately
represent your business

1. Does the bank balance in the bank match what is shown in your bank account on your books

2. Do the recorded sales or income match the money that you deposited in your bank account-if not can you explain why (could be fees or sales tax or maybe you are duplicating sales 🙄)

3. You have negative expense account balances

4. You show open invoices that have been paid

5. You have ignored your bookkeeping all year
Carrie Poppelaars
CEO of Local Ledgers LLC & Community Manager
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Carrie Poppelaars
CEO of Local Ledgers LLC & Community Manager

Is is really that important to reconcile my bank accounts each month?

YES!   YES!  YES!

Let me tell you why.  If you think about it, everything goes through your bank account eventually.  Sales get deposited into your bank account, everything is eventually paid through your bank account.  Even if you buy it on a credit card, the payment comes from your bank account. When your bank account is reconciled, you know that all the money in and out is correct.  It my not be classified correctly but it is accounted for.  I tell my clients if it in not in the bank account IT DID NOT HAPPEN!

Errors that can go undetected in an unreconciled bank account:

  1. Duplicate sales transactions-resulting in overstated income and possibly extra taxes paid
  2. Duplicate expense transactions
  3. online deposits that did not go thru for some reason- I have found this issue many times, saving my clients money and basically paying for my services
  4. bank errors-they do happen