Books fall behind when accounting is a separate job done from copies of invoices and bank statements. They stay current when every business document posts its own accounting entry as it is saved.
Post from documents, adjust by journal
Sales, purchases, receipts, payments and expenses should create their own journal entries. Manual journals are then needed only for genuine adjustments, such as depreciation or corrections, and each one should carry a clear narration.
A short monthly close
- Check that all invoices, purchases and expenses for the month are entered.
- Allocate receipts and payments to the right invoices, and review advances.
- Review the trial balance for unusual balances.
- Compare receivables and payables with customer and supplier statements.
- Review GST reports for the month before filing.
- Export and file the month’s key reports.
Correct, don’t erase
When a posted document is wrong, cancel or reverse it and enter it again correctly. A reversal keeps a trail of what happened; deleting does not.