Transactions in an accounting system represent a detailed record of your business activities. These detailed records are regularly selected, sorted, and summarized to provide information for you to run your business. If you don’t post your transactions on a timely basis, you’re getting incomplete information.
To make sure you’re getting the best information, make sure that the business transactions in your business are being created, reviewed, approved, and posted in your accounting system on a timely basis.
These are some of the things you can do to make sure your business information is accurate:
- Enter purchase orders as soon as a commitment has been made to your vendors.
- Perform regular inventory counts to verify your inventory quantities.
- Perform bank reconciliations as soon as possible.
- Post shipping transactions as soon as inventory leaves your control.
- Post customer invoices as soon as possible after shipment or delivery of service.
- Incorporate employee time and expense entry systems to reduce the amount of time it takes to accurately bill for professional services.
- Apply customer payments to accounts as soon as possible, and deposit to your bank.
- Post inventory receipts as soon as the inventory is cleared from the receiving dock. You can match up vendors’ invoice later.
- Incorporate automated integration processes to create large numbers of detailed transactions (e.g. periodic payroll registers) or to connect to external transaction systems (e.g. ecommerce websites)
If you want your accounting system to be up to date and provide the best business information it can, you have to make sure your business transactions are being created and updated on a timely basis. Using a well integrated hosted ERP system that is available to all your employees is a good start.