Balancing the books and the farm – some practical bookkeeping tips

Running a business is hard work, and keeping on top your accounts can sometimes feel like one job too many. However, good bookkeeping makes a big difference. It helps you stay organised, avoid mistakes and make informed decisions. Here are a few key points to keep in mind:

Bank Reconciliation

Regular bank reconciliation keeps your records accurate and trustworthy. It means checking that every transaction in your accounts matches what appears on your bank statement. Doing this monthly helps catch missing payments, double entries and bank errors early. If your accounts and bank do not balance, it is a sign something needs attention.

Debtors & Creditors Reports

Your debtors are customers who owe you money, while your creditors are suppliers that you owe money too. Reviewing the aged receivables/payables reports regularly helps you spot overdue payments and avoid accidentally paying the same bill twice. It can also highlight any duplicate entries, which is a common issue when invoices are entered manually or from multiple sources.

Regularly Review Financial Reports

Do not leave your financial reports to your accountant at year-end. Regularly reviewing key points such as your Profit and Loos and Balance Sheet gives you a clear picture of how your business is performing.

It is also worth checking through your general ledger from time to time. Doing so can help you spot mis postings or transactions coded to the wrong heading codes.

Accurate Descriptions & Livestock Numbers

When recording transactions, always include a short but clear description, no matter what the transactions is for. A few words explaining what the entry relates to, for example “winter wheat seed”  “sale of hay bales”, or “3 ton of beef nuts”, makes a big difference later.

If you are buying or selling livestock, include the number and type of animals, such as “12 store lambs.”

Clear and consistent descriptions will help save time during accounts preparation and reduce the chance of errors or queries at year-end.

Attaching Invoices / Filling of Invoices

Keep all invoices, receipts, and supporting documents attached to the relevant transactions. Most modern accounting software lets you upload or photograph invoices straight into the system, saving you from piles of paper.

However, paper filing still has its place, especially if you prefer having hard copies or if your broadband is unreliable. Make sure you file them in date or supplier order, so they are easy to find later.

Final Thoughts

Bookkeeping might not be the most exciting part of running a business, but it is one of the most important. At Mitchells, we provide a full bookkeeping service, as well as training/ongoing assistance to clients as needed. Don’t hesitate to contact us if we can help.