1. Maintain records regularly. This is one of the most basic rules: If you don’t keep accurate daily records, you don’t have an accurate way to track the financial condition of your business. Different people use different record-keeping systems; what matters is that you have one and use it every day. Once you have a good system set up, accurate record keeping will take just a few minutes a day.
2. Handle and review checks carefully. It’s easy to be on autopilot when you’re writing checks and tossing canceled ones into a filing cabinet without reviewing them. Remember: Those checks are as good as cash. And if something goes wrong, you — not the bank — will be on the hook. This means keeping your checks in numeric order, not skipping checks, and keeping separate bank accounts for your business and personal funds.
3. Protect your company from check fraud. Set up financial limits for checks with your bank. Require 2 signatures for checks over $5000. Ask that your bank never cash checks made out to an individual, except for payroll checks, which should be written from a payroll account and only to designated individuals. Keep inventory of blanks checks — and keep all checks secure in a safe or lockbox. Take the same care with checks as you would with cash. Sign checks using a clear, distinctive signature that won’t invite forgery.
Read Full Story: 10 Accounting Tips for SMBs