How can you tell whether your accounting is really up to date?

Why "up to date" means more than "booked"

Many business owners see accounting as an obligation for the tax return. It is therefore often only brought up to date when the year-end closing is due. It is then complete, but useless for decisions during the year. If you only find out in April that last year went worse than expected, there is nothing you can change.

Up-to-date accounting answers three questions at any time: how much money is really available? Who owes me what, and what do I owe? Is the business making money this year?

Ten signs of up-to-date accounting

1. Bank accounts are reconciled. At the end of each month, the balance in the books matches the bank statement, for every account and every credit card.
2. Open invoices are correct. The list of open customer and supplier invoices reflects reality, without old items that were paid long ago.
3. VAT is reconciled. The return is prepared from the accounts and checked against them. It is due within 60 days of the end of the reporting period.
4. Payroll matches. Payroll accounting, financial accounting and the declarations to the social insurers show the same figures.
5. Receipts are complete. Every entry has a receipt, stored digitally and easy to find. Books and receipts must be kept for ten years.
6. The owner's account is clean. Private expenses paid by the company, expenses and loans are recorded traceably on the current account.
7. The month is closed quickly. The figures are available no later than two to three weeks after the end of the month.
8. Accruals are booked. Large invoices covering several months are spread, so that monthly results are comparable.
9. There is a look ahead. Liquidity for the coming weeks can be derived from the current figures.
10. You read the figures. At least once a month, you look at revenue, costs, result and liquidity, ideally compared with the previous year or the budget.

Self-check

Self-check

How up to date is your accounting?

Tick what applies to your business today.

All bank accounts are reconciled up to the end of last month. The list of open customer invoices is correct and old items are cleared. The last VAT return was prepared from the accounts and reconciled. Payroll and financial accounting show the same salary totals. Every entry has a digitally stored receipt. Private expenses and business expenses are clearly separated. A month's figures are available no later than three weeks afterwards. Every month I see revenue, result and liquidity.

Typical warning signs

• The books are only brought up to date once a year for the annual accounts.
• VAT regularly requires corrections or back payments.
• The bank balance surprises you, positively or negatively.
• Customers receive reminders although they have paid, or invoices remain unpaid without anyone noticing.
• The bank asks for interim accounts, and it takes weeks to produce them.

How to keep accounting up to date

Every week

• Capture receipts digitally, for example by app or scan, instead of collecting them
• Book payments or import them automatically from the bank account

Every month

• Reconcile bank accounts and credit cards
• Review open items and send reminders
• Book salaries and reconcile them with payroll
• Take a quick look at revenue, result and liquidity

Every quarter

• Prepare, reconcile and file the VAT return on time
• Review accruals and prepare an interim result

Modern software such as Bexio, Abacus, Banana, Xero or Infoniqa takes a lot of the work off your hands: bank data is imported automatically and receipts are captured by photo. What remains decisive, however, is that someone reconciles regularly and checks the figures.

How I support you

I keep your financial accounts or take over review and year-end closing if you do your bookkeeping in-house. If the accounting is behind, I first bring it up to date and then set up a routine that suits your business. The result is a set of annual accounts that stands up to the tax authorities, the bank and the auditors.