5 Ways to Improve Your Accounting Skills From Home

Many businesses are stuck trying to update their accounting and financial records from home. It may be a new area you never expected to have to handle, let alone with a little one running in and out of your makeshift home office.

Make sure internally created documents have a unique identifier

A unique identifier is a series of numbers and letters generated for a document that is unique to only that document. For the same reason your business checks include a unique identifier (check numbers), you should be adding a unique identifier to every internally created business document as well.  

When a customer invoice is created, it should always be assigned an invoice number. This practice comes in handy when you receive your customer’s payment but you have many invoices due from the customer.

To find out which invoice the customer is paying you only need to ask “what is the invoice number related to this payment?”  Once you receive the invoice number from the customer, you will be able to apply for the payment and appropriately mark it as paid. 

Unique identifiers also help mitigate confusion between your business and the person receiving the document. 

For example, with unique identifiers, you can help keep track of the connections between, customer quotes, customer invoices, and customer bills. This can prevent accidentally including the wrong invoices on the wrong customer statements which can just leave you feeling embarrassed.

Update your records every day

Almost all businesses have daily financial transactions. If you take 5-10 minutes to update your bookkeeping and financial records daily, you won’t have to spend days and hours at the end of each quarter or year organizing your records.

This will alleviate a lot of stress caused by tax season or financial statement deadlines. It will also ensure you are completely familiar with the daily transactions of your business so you are more likely to identify if theft or waste were to pop up.

Scan your financial documents as soon as you received them

To quickly be able to pull and provide financial documents to requesting parties, they should always be scanned and saved electronically. 

Some accounting softwares like QuickBooks and Xero allow you to store document copies and attach them to the related transaction in the software. Then when your accountant, creditors, or investors request copies of documentation, you will not have to rifle through piles of paper to find them!

Another great software that can be helpful in storing documents is HubDoc. It is a smart filing system that scans documents, shares them with the appropriate sources, and even pulls in documents from third parties, like your bank!

File your receipts and financial documents by account and then by date

When you first receive a financial document (bills, receipts, invoices, customer payments) make a copy of the document that you can file for your records. Then organize your files by account and then by date. 

For example, if your company purchases a new car, you would file the purchase document under “Fixed Assets” or “Vehicles” and then ensure that every document within these files are in sequential order.  

Print your financial reports regularly and compare them 

Preparing and printing reports such as Accounts Receivable Aging, Accounts Payable Aging, Profit and Loss Statements, and Balance Sheets regularly gives you the chance to make notes and comparisons between periods. You can identify patterns in revenues and profits based on the season or clients you have onboarded. 

For example, perhaps you will notice that you make more sales at the beginning of the month, but you do not collect on these sales until the end of the month. Finding out this information can have a huge impact on your cash flow management and give you the power to anticipate and survive fluctuations in revenue, or customer collections.

No one wants to be stuck at home trying to navigate through these tough times while simultaneously trying to run their business. However, by practicing and developing the skills mentioned above, you can turn this hard time into a productive period that allows you to get organized and improve your accounting skills.