Managing Files

Article from Microsoft at Work on organizing your files:

http://www.microsoft.com/atwork/productivity/files.aspx

Interesting Quotes

Read, every day, something no one else is reading. Think, every day, something no one else is thinking. Do, every day, something no one else would be silly enough to do. It is bad for the mind to be always part of unanimity.
- Christopher Morley

Dance like it hurts;
Love like you need money;
Work when people are watching.
- Scott Adams

Good judgment comes from experience, and experience comes from bad judgment.
- Barry LePatner

If the only tool you have is a hammer, you tend to see every problem as a nail.
- Abraham Maslow

The two most common elements in the universe are Hydrogen and stupidity.
- Harlan Ellison

It is a paradoxical but profoundly true and important principle of life that the most likely way to reach a goal is to be aiming not at that goal itself but at some more ambitious goal beyond it.
- Arnold Toynbee

Progress isn't made by early risers. It's made by lazy men trying to find easier ways to do something.
- Robert Heinlein

There is nothing so useless as doing efficiently that which should not be done at all.
- Peter Drucker

Nobody knows the age of the human race, but everybody agrees that it is old enough to know better. -Anonymous

Managing your Business

Forming a business structure: is incorporation right for you? from Small Business Trends
http://smallbiztrends.com/2010/04/forming-a-business-structure-%e2%80%93-is-incorporation-right-for-you.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+SmallBusinessTrends+%28Small+Business+Trends%29&utm_content=Google+Feedfetcher

Great Wikipedia article on Small Business:
http://en.wikipedia.org/wiki/Small_business

Inc. Magazine's "30 Books Every Business Owner Should Read"
http://www.inc.com/magazine/20090401/the-business-owners-bookshelf.html?partner=newsletter_Sales

A Brain Map for How to Spend Executive Time from Anita Campbell at Small Business Trends
http://smallbiztrends.com/2009/04/brain-map-executive-time.html

Anita Campbell of Small Business Trends reviews Small Business Operator
http://smallbiztrends.com/2009/08/small-business-tax-deductions-bookkeeping.html

Qualitics Recommends...

Incorporate Your Business or form an LLC (~$100-150)

www.LegalZoom.com

www.mycorporation.intuit.com/

www.bizfilings.com/

www.Incorporate.com

Most attorneys and CPAs can help you, also.

* Register your election as an S-Corp. with the Federal government, if appropriate
* Register your company with the Georgia Secretary of State (~$30/year)
* Obtain a Federal Employer Identification Number (EIN pattern 12-3456789)
Identifies your business to the Federal Government for all your Federal taxes
* Obtain a Georgia Department of Revenue withholding account number (pattern 1234567-AB)
Used for Payroll to identify GA Withholding Taxes
* Obtain a Georgia Department of Labor account number (pattern 123456-78)
Used for Payroll to identify State Unemployment Taxes
* Establish a relationship with an attorney and a CPA – their knowledge and advice is invaluable

And…

* Set up a free Yahoo! Account
o You can add a Small Business account inexpensively – use this Yahoo! Small Business for your business e-mail
o You can add a Yahoo! Group to stay in touch with customers, employees, etc.
* Set up a Google account, with free Gmail
o You can add Google Docs free – word documents, spreadsheets, etc.
***You can “sync” your Yahoo! and Google contacts, e-mail and calendars with Outlook, so you have your organizer info wherever you are!
* Subscribe to QuickBooks Online Edition – let Qualitics help!
o Cost for 3 users plus an accountant is less than desktop versions
o Qualitics clients get a 40% discount!
o Hosted by Intuit – no software to buy – automatically backed up
o You never have to upgrade again!
o You and your employees and accountant access your QuickBooks data from anywhere with an internet connection!
* Set up a free Manymoon account
o Manage and share projects and tasks!
* Set up a Jott account
o Dictate notes via your cell phone; have them show up transcribed in your e-mail with attached “voicemail”

SAMPLE Chart of Accounts

Click for published spreadsheet:

http://spreadsheets.google.com/pub?key=pH2VCMPis9coLdigPF4kfDg

SAMPLE Collections Scripts

Customer: _____________________________ Account__________________


1st Collections Call

You may have forgotten that your payment was due on _____________________.
Your account is _________ days overdue.
If you can get the payment to us by _________, I can waive the late fee for this month.
When will you be able to pay the account in full? ________________________
Can you make a partial payment of ___________ by __________________________?

Called by: ________________________ Date: ___________ Time: ________________

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

2nd Collections Call

We called you on _____ and you agreed to pay $________ by ___/___/___.
We have not received that payment.
Your payment was due on __________ and your account is _______ days overdue and you are accruing late fees.
When will we receive payment? _______________________________

Called by: ________________________ Date: ___________ Time: ________________

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

3rd Collections Call

Your payment was due on _______.
Your account is _____ days overdue and you are accruing late fees.
When will you be able to pay the account?________________________________
If not paid in full by that date your account will be suspended and [enter the next step in your formal collections process: referred to a collection agent/filed in small claims court/etc.].

Called by: ________________________ Date: ___________ Time: ________________


Instructions:

1st Collections Call

After getting customer’s commitment to pay by a specific date, file this for follow-up on the day after that date. If payment is received, file this form in the customer’s permanent file.

If payment is not received, make 2nd Collections Call.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

2nd Collections Call


After getting customer’s commitment to pay by a specific date, file this for follow-up on the day after that date. If payment is received, file this form in the customer’s permanent file.

If payment is not received, make 3rd Collections Call.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

3rd Collections Call

After getting customer’s commitment to pay by a specific date, file this for follow-up on the day after that date. If payment is received, file this form in the customer’s permanent file.

If payment is not received, route customer’s file to Manager for formal action.

Records Retention Links

> From Shine

When to keep or toss records


> Banker's Box

http://www.bankersbox.com/

> Ask Alice About Record Retention

Alice Magos is an online advice columnist for CCH's Business Owner's Toolkit.

http://www.bizfilings.com/newsletter/choosepastissue.asp?issue=211&a=2

About the author: Alice H. Magos, an accountant and certified financial planner, is the online advice columnist for "Ask Alice" on CCH's Business Owner's Toolkit. Her column offers direct, practical advice on starting, financing, managing and marketing small businesses. If you would like to have a question answered by Alice, please email your question to mailto:newsletter@bizfilings.com Type "AskAlice" in the subject line of your email.

> CSO Seven Deadly Sins of Records Retention

http://www.csoonline.com/article/220939/The_Seven_Deadly_Sins_of_Records_Retention

QuickBooks Knowledge Base Links

Accrual or cash basis balance sheet is out of balance: http://www.quickbooks.com/Helpcenter/DoSearch.aspx?kbid=107815&product=SG_ALLQUICKBOOKSSIMPLESTART_1_2_Fam


Cash-basis balance sheet displays balance for Accounts Receivable (A/R) account: http://www.quickbooks.com/support/faqs/qbw2001/83157.html

SAMPLE Phone Script

Always have paper and pen ready when answering the phone.

1. Good {morning / afternoon / evening} and thanks for calling [company].

This is [name]. How may I help you?

2. I’m sorry [name] is not available. (DO NOT give any more details than this!)

• May I {transfer you to his/her voicemail (on extension ###) / take a message}?

• Perhaps someone else can help you?

  • May I {transfer you to his/her extension ### / take a message}?
    

Phone Script	1 of 1	Revised: 2/25/2007 11:44 a2/p2
Previous versions are OBSOLETE!

SAMPLE Handling Receipts

1. All payments will be documented on written receipts.

2. Three-part receipts will be used:

White – give to customer or {put in customer file/shred}

Yellow – give with money to be posted in books

Pink – KEEP IN RECEIPT BOOK PERMANENTLY

3. Receipt book numbers will be logged and issued/collected by {General Manager/Controller}.

4. One receipt book at a time will be issued to a {station/individual}.

5. Only one {station/individual} will use any receipt book.

6. Each {station/individual} will use only one receipt book at a time.

7. {Receipts in receipt books are only for receiving payments. A separate “Paid Out” voucher must be used for disbursed amounts.}{Receipts in receipt books must be used for receiving funds and may be used occasionally to disburse funds by prominently marking them ‘PAID OUT’ and indicating the amount is a minus.}

8. If a receipt must be voided, all three copies must remain in the receipt book and are all marked ‘VOID.’ Staple back together if necessary.

9. Receipt books will be included in periodic audits. The {station/individual} who used the receipt book may not audit it.

10. Where a receipt book is used in conjunction with a cash drawer or petty cash box, the cash drawer/box reconciliation must indicate receipt numbers included and a copy of the reconciliation must be retained in the receipt book.

Handling Receipts	1 of 1	Revised: 2/25/2007 11:05 a2/p2
Previous versions are OBSOLETE!

SAMPLE Customer File Contents

All Customer files will be audited periodically for the following items. Unless marked ^*optional all items are mandatory.

Item	Current Version	Sample	Comments
Application
Contract
Payment Authorization
Rules & Regulations
Identification
Key/Pass Issue
Insurance Certificate
Emergency Contacts
Property Description(s)

Customer File Contents	1 of 1	Revised: 2/25/2007 11:35 a2/p2
Previous versions are OBSOLETE!

SAMPLE Adding Customers

Customer Service

1. All Customer contact must be documented.

2. Record Customer name and contact information.

(SEE “Customer Sales and Service” documents for scripts, pricing and required sales activities)

3. Prepare a custom Estimate, revise as necessary.

   1. If Customer does not accept an Estimate SEE “Keeping Potential Customer Information” documents.

4. Have Customer sign the accepted Estimate.

5. Prepare a new Customer File. (SEE “Customer File Contents” document)

6. Accept payment. (SEE “Handling Receipts” document)

7. Forward payment and new Customer File to {Bookkeeper/Data Entry/Marketing/Sales/General Manager}.

Adding Customers.doc	1 of 1	Revised: 2/25/2007 11:25 a2/p2
Previous versions are OBSOLETE!

Inventory Accounts

		Dr	Cr.	Value
	Purchase Inv. Item
	Rec. Item & Vendor Bill	Inv. Asset	A/P	Cost
	Pay Bill	A/P	Cash	Cost
	Sell Inv. Item*
	Invoice Customer	COGS	Inv. Asset	Cost
		A/R	Income	Sell
	Rec. Customer Pmt.	Cash	A/R	Sell
	*Gross Profit=Sell minus Cost (calculation only)

"Normal" Account Balances

Account Type	"Normal" (positive) balance
Asset	Dr
Liability	Cr
Equity	Cr
Income	Cr
Expense	Dr

Process Audit

Physical examination of primary documents and audit trail to accounting software:

1. Compare receipts books/logs and accounting software records– are all receipts entered in accounting software? If no, investigate and resolve.
2. Compare the images of a sample of cancelled checks in the bank statement with the accounting software record – are any payees or amounts different? If yes, investigate and resolve.

Routine examination of items in the accounting software:

1. Scan Chart of Accounts for any anomalies.
2. Sample P&L and Balance Sheet (examine Trial Balance) to ensure that transactions are booked to the appropriate accounts. If inappropriate bookings are due to memorized transactions or to inventory item mis-assignment, resolve the error at the root cause.
3. Run a report showing all closed customer accounts and any balances – are they all zero? If no, investigate and resolve.
4. Run a report showing all new customer accounts – have all been charged? If no, investigate and resolve.
5. Run similar reports for vendor accounts; sample to ensure vendor payments have not been posted to unusual accounts.
6. Examine bank, cash and credit card accounts – have all been reconciled regularly? If yes, what is the total amount (per period) of any reconciliation discrepancies? If unusually large, investigate and resolve. If accounts were not reconciled, investigate and resolve.

Special circumstances:

1. If trainees/temps are entering data, look at some of their work to see how well initial standards have survived levels of translation and interpretation.
2. If inventory is used, examine the process of adjusting and reconciling inventory.
3. Look at any specific items or files parent company may be particularly concerned about.
4. See if there are any opportunities to cross-check between front office and accounting software that can shorten the processing and/or audit process.
5. Determine what the data backup process is and if it’s being used regularly.
6. Determine what the accounting software update process is and if it’s being used correctly.

Send preliminary report of findings to parent company for distribution/action.

1. List closed audit items, noting any minor findings corrected during the audit.
2. List open audit items.
3. Give/request timeline for remediation and to close open items.

After remediation/resolution:

1. Send final audit report to parent company and auditee showing all audit items closed.
2. Make a backup of the accounting data and send to parent company for archive.
3. Send the data to accountant and do a preliminary close so nothing can be changed until s/he issues closing entries.
4. Parent company should institutionalize correction (via written Policy documents) of any misunderstandings or broken processes.

If all goes well, on-site should take 4-6 hours, overall 8-12 hours.

© 2005, 2006, 2007 Qualitics, Inc.

Debits and Credits "Cheat Sheet"

Acct Type	Dr	Cr
Asset	+	-
Liability	-	+
Equity	-	+
Income	-	+
Expense	+	-

Key: a '+' in the Dr column, for instance, means that a Debit will increase the value of the account

Useful Business Links

Eleven Easy Ways to Destroy Your Business from The New York Times

http://finance.yahoo.com/career-work/article/108043/eleven-easy-ways-to-destroy-your-company

5 Great Software Packages per Inc. Magazine

http://www.inc.com/ss/5-great-software-packages-bootstrappers?partner=newsletter_Success#0

Wikihow Article on Personal Budgeting

http://www.wikihow.com/Budget-Your-Money

Getting Organized

http://www.wikihow.com/Be-Organized

Don't do Dumb Things...Like These

http://money.cnn.com/magazines/business2/101dumbest/2007/index.html

How Business Works

http://money.howstuffworks.com/business-channel.htm

How to Resolve a Conflict at Work

http://www.wikihow.com/Resolve-a-Conflict-at-Work

How Credit Cards Work

http://money.howstuffworks.com/credit-card.htm

How to Create a Business Continuity Plan (BCP)

http://www.wikihow.com/Create-a-Business-Continuity-Plan

CASH HANDLING REVIEW GUIDE

(Adapted from University of Kansas Controller’s Office Documents)

This self-assessment guide examines controls over the handling of money within a business unit. The guide covers essential procedures for collecting and safeguarding cash and checks, making deposits, handling change or petty cash funds, and maintaining accounts receivable records. Although the guide is targeted for financial activities that require a minimal level of sophisticated controls, the general concepts are valid for any control system. The company's accountant and consultant are available to answer questions about this guide and to assist in improving any cash handling controls.

Types of Revenue

Review the types of sales, fees or charges being collected.

• Are all fees and charges collected by the business unit authorized by specific reference or provision (such as business unit cost recovery fees)?

• Is the cash handling function properly supervised?

• Are sales transactions periodically reviewed by a specified person to ensure that all sales have been authorized, correctly priced, and recorded?

• Has a determination been made as to whether state sales tax must be collected?

• If assistance is needed in making this determination, contact the company’s accountant.

• If required, has sales tax been collected and identified on deposit slips?

Cash Receipts

• Review cash receipts to ensure that all money received by the business unit is deposited

• Are cash collections promptly recorded through the use of prenumbered receipts prepared by an individual designated to receive cash?

• Does the business unit use the company’s receipt vouchers or another form of receipt documentation for all sources of revenue? (Not applicable for cash register sales.)

• If prenumbered receipts are used, check for the following:

  • Are receipts used in numeric sequence?

  • Can receipt numbers be traced to specific deposits?

  • When tracing receipts to deposits, are all numbers accounted for to ensure no receipts are missing?

  • Are all copies of voided receipts retained to help account for all receipt numbers?

  • If a receipt number is missing, is an attempt made to explain why and are procedures then reviewed to ensure all funds are adequately controlled until deposited?

• If receipts are used, select a recent period and determine the following:

  • Are receipt books signed out to a specific employee to help fix responsibility for funds collected?

  • Are receipts prepared in multiple copies (i.e., a copy for the customer, business unit, and one to attach to the deposit slip)?

  • Are receipts completely filled out: showing date, amount, who paid and why, and signed by employee receiving funds?

• Are all checks restrictively endorsed ("For Deposit Only") immediately upon receipt to limit negotiability?

• Is there adequate separation of responsibility in handling funds and keeping the accounting records?

  • No one person should receive/deposit funds and also maintain the accounting records for the business unit. When such a separation is not possible because of staffing limitations, then the business unit's monthly report should be carefully reviewed by the business unit head or designated representative. This review should include whatever steps are necessary to ensure business unit receipts have been deposited as discussed below.

• If funds are transferred between individuals in the business unit prior to deposit, is the transfer documented to help fix responsibility to only one person at any point in time?

• If payments are received by mail, is accountability for cash and checks established immediately upon receipt?

• If the person opening the mail is not usually responsible for handling cash, payments should be recorded in a daily log when received. The log should be used to transfer the funds to the cashier or other personnel responsible for deposits, who would sign the log to acknowledge receipt of funds. The log should include a detailed listing of amounts received, source of funds and reason for payment.

• Are records maintained on returned checks not honored by banks?

  • Do the records adequately document action taken to collect on the checks and account for any funds received?

  • Are these records maintained by someone not usually involved with the collection of cash?

  • If those functions must be combined because of staffing limitations, more frequent and in-depth supervisory review is required (i.e. tracing the disposition of returned checks and comparing payments with deposits credited to the account).

Deposits

Review deposits to ensure that all funds are being deposited on a timely basis. Deposits should be made daily unless the small amount of funds involved make this impractical. In that instance, a reasonable time schedule for deposits should be maintained, keeping in mind the need for adequate security procedures. The holding of funds over weekends should be discouraged and kept to a minimum.

• Are the deposit slips verified by referring to prenumbered receipts to ensure all funds have been included in the deposit?

• Select one or two deposit slips and verify the total dollars deposited by referring to any supporting documentation such as prenumbered receipts.

• Are validated deposit slips returned to the person performing the accounting function for the business unit after the deposit has been made?

• Are all deposits for the month verified by comparing the deposit slips to the monthly accounting report to ensure all transactions were received and correctly recorded?

• Business unit records should be reconciled monthly with bank statements and other reports. If adequate separation of responsibility cannot be maintained, this monthly comparison of business unit transactions should be documented by the person responsible for maintaining business unit accounts. The business unit head or designated representative should then review the monthly report. This reconciliation and review process should be discussed in more detail in the review guide on purchasing and disbursements.

• If funds are collected for special purposes, are procedures clearly specified for maintaining separate accounting records?

Safekeeping Devices and Controls

Verify that adequate security procedures and controls have been established. The overall objective is to fix responsibility for funds with only one person at any point in time. This control is in the best interest of both the company and the individual(s) responsible for handling money.

• Are separate, lockable containers or compartments available to each person collecting money? Is the money locked up when the person responsible for the funds leaves the area?

• Are keys to a cash box, file, or desk that contains money restricted to the person responsible for the funds?

• Extra keys should be controlled in a “key-safe.” Numbered tags should be attached to each unique key (or multiple copies). An index of tag numbers to keys should be maintained. For extra security the index should not be stored with the keys. Keys should not be stored with their function/location labeled on the key.

• If a file cabinet is used and access cannot be restricted, a lock box should be provided for use by the person responsible for the money.

• If a safe is used, is the combination restricted to only essential employees? A sealed envelope containing the combination should be retained by a supervisor. (Both the employee and supervisor should sign over the seal on the envelope.) The combination should be changed whenever a person with access leaves the business unit or changes jobs and no longer requires access to the safe.

• While cash receipts are being held for deposit, is the money ever used to make purchases for the business unit? Such disbursements should never be allowed. An authorized petty cash fund for the purchase of small items should be used exclusively to make small cash purchases.

• The handling of money will normally generate some cash overages and shortages.

  • Is a record of overages and shortages maintained for each person handling cash?

  • Is the record reviewed by a supervisor periodically to detect any trends or consistent errors, either in overages or shortages?

  • Are cash overages deposited and not held in a "slush fund"?

Accounts Receivable

Review transactions that may be classified as accounts receivable. An accounts receivable occurs when business units bill for goods or services rather than requiring immediate payment.

• Have written policies and procedures been approved to control who will be billed, to establish dollar limits on charges, to outline payment requirements, and to summarize action to be taken in case of nonpayment?

• Are the policies being followed?

• Are individual accounts receivable records maintained showing amount charged and payments made?

• Are the total unpaid charges at the end of each month reported and reconciled?

• Is a person not directly involved with the handling of cash responsible for maintaining the accounts receivable records? If this is not possible in small business units, more frequent and in-depth supervisory review will be required. For example, the above reconciliation should be documented by the person maintaining the records then reviewed at least monthly by the head of the business unit or designated representative.

• If attempts to collect delinquent accounts are unsuccessful, are the accounts reported to the business unit head for collection? Is appropriate documentation maintained if the debt is referred to a collection agency or attorney or written off?

• Is future credit refused to those with delinquent accounts?

Petty Cash and Change Funds

If the business unit has a petty cash or change fund, review for the following:

• Does the business unit have a change fund as a means of making change when receiving payments?

• Was the change fund established through the Accounting office?

• Are reconciliations prepared monthly and forwarded to Accounting?

• Does the business unit have a petty cash fund?

• Was the fund established through the Accounting office?

• Is the fund reconciled and replenished monthly through the Accounting office?

• Are change and petty cash funds safeguarded against theft, not commingled with personal funds of an employee and not used to make loans, advances or to cash personal checks for employees?

Please direct any questions to your accountant or consultant.

Top Ten Tips to Help Prevent Fraud (in Order of Effectiveness)

1. Send Bank and Credit Card Statements to a Separate Address. Do not send your bank statements to your business address. Have your bank statement sent to your home, PO Box, or lockbox address. Review each check both front and back for payee, signature, and endorsement. Even if you don’t allow your employees to use your credit card, make sure those statements are sent to an alternative address too. Examine each statement carefully. Review each and every line item of both payments and charges.

2. Do Not Let Anyone Misrepresent Themselves as You. Do not let them use your password, sign your name, or use your credit card, ever. Never let an employee sign your name, use your credit card, or misrepresent themselves to your bank or Credit Card Company. Reimburse their expense. Don’t reveal sensitive passwords. If you allow your employee to sign your name even on credit card purchases, it could compromise your legal recourse in case of fraud or embezzlement. If you determine that there is a persuasive business case to be made for employees to use your company credit card, have one issued in their own name, for their own signature.

3. Reconcile Bank Accounts and Review Statements. Review every statement. Make sure all bank and credit card accounts and are reconciled. Afterwards, take time to review every reconciliation report. Notice stale checks or deposits that have not cleared the bank. Check for missing deposits. An increase in the number of reconciled items may also reveal mischief.

4. Assign Administrative Rights Effectively. Use the Administrative rights in QuickBooks to protect your data. The first person to set up QuickBooks is by default assigned as Administrator. This role has unique permissions. So the administrator should be designated to either an outside party, i.e., a CPA, a QuickBooks Certified Consultant, or the savvy owner. Make sure that every user is set up separately and that passwords are used. Lock down permissions to change or delete transactions. Especially important: Use passwords for closing dates.

5. Use the Audit Trail in QuickBooks. If you don’t have the latest version of QuickBooks, make sure you turn on the Audit Trail. Go to Preferences > Accounting and click on the box Audit Trail. Caution: the Audit Trail won’t tell you if a vendor name has been changed or merged. It is wise to maintain a strict paper trail. Supporting documents need to be readily accessible in your files and then archived according to the type of document.

6. Use the Voided/Deleted Transaction Report. After you have turned on the Audit Trail, and made its review part of your routine, periodically review the Voided/Deleted Transaction Report to see which entries which have been modified.

7. Establish Accounting Controls. The principle of countervailing power is the fundamental reason to use checks and balances in accounting. Split the responsibilities between staff members or outside accounting professionals. Warning Sign: If only one person writes the checks and reconciles the account, there is no double check. Separate the duties. Consider another person to do reconciliations so it is done by a person other than the staffer generating the checks. Use similar controls in the Accounts Receivable process to prevent misdirection of funds. A QuickBooks ProAdvisor® or CPA can provide these services. Even if you put smart management controls in place, have an owner or officer review reconciliations and financial reports (including detailed, selected vendor and customer accounts) on a regular basis.

8. Adhere to a Numerical Sequence. Use a numerical sequence for all transactions. Invoices, bills, and checks which are numbered fall in a logical and chronological order. The reason: To identify missing documents. Look at the bank statement for large gaps. Secure paper checks. If you keep voided paper checks, remember to tear off the signature area to keep it from being misused. If your bank sends paper checks, sort them numerically.

9. Review Receivables and Payables. Look for adjustments to Receivables or Payables. Such adjustments could indicate subverted payments or re-directed vendor checks.

10. Back up Your Data. Repeat after me – Back up, back up, back up. Think redundant backups as a contingency plan for disasters of all sorts. Make scheduled copies. Rotate the media (tape drive or portable storage). If you use CDs, better buy the read-only variety. Store your backups at another location. Such diligence can come in especially handy if there is a disaster. In some fraud cases, the bookkeeper may delete all of the QuickBooks files to avoid detection. In such cases the business has to pay a large sum for data retrieval, in hopes of capturing any shred of evidence. Be smart; back up. It only takes a few minutes.

Let us know if you have any questions.

Files and how to Keep Them

Keep your personal records and your business records separate per IRS!

Permanent Files

• Keep these in a safe-deposit box or fire-safe (you may want to keep photocopies handy in your office):

  • Company/Corporate Records

    • Certificate of Incorporation

    • Corporate Seal

    • Resolutions

    • Meeting Notices and Minutes

    • Tax Identification Documents

    • Insurance policies

  • Backups of electronic Accounting files and critical Operating files

• Keep these in a file drawer:

  • Operating files:

    • Customer agreements and correspondence Insert or link Customer List here

    • Vendor agreements and correspondence Insert or link Vendor List here

    • Employee files and records Insert or link Employee List here

    • Bank agreements and correspondence

    • Credit Card agreements and correspondence

    • Loan agreements and correspondence

    • Professional agreements and correspondence, for example, Attorney, CPA, Bookkeeper

    • Equipment/asset history files Insert or link Asset List here

  • Subject Files Inset or link file list here

  • Active Project Files - (you may want to keep these in an “active” file on desktop or credenza, for example) Insert or link file list here

• Annual Files – (may be electronic, e.g. in QuickBooks®)

Keep any hard copies in an active file and store the old records in a “transfer file” by Year:

• Accounts Receivable/Income(Customer Invoicing and Payment Records)

  • Keep paper “backup” in a file organized by customer or date

• Accounts Payable/Expense (Vendor Bills and Payment Records)

  • Keep paper “backup” in a file organized by vendor or date

• Payroll (Employee Time, Expense and Payment Records)

  • Keep paper “backup” in a file organized by employee or date

• Tax Returns, Reports and other records

• Unreconciled bank transactions – deposits and withdrawals (reconcile, then move to…)

  • Reconciled Bank Statements and checks/deposits

• Unreconciled credit card transactions – charges and credits (reconcile, then move to…)

  • Reconciled and paid Credit Card Statements

• Financial Reports – Profit & Loss, Balance Sheet, Cash Flow

• Other Reports – Sales, Inventory

• Closed Project Files

• Closed Operating Files - mark “Closed” and file with the year in which they closed

Consult your Attorney and CPA for advice on how long to keep Annual Files.

You can view a sample suggested file retention schedule at www.bankersbox.com.