Good paperwork habits allow good bookkeeping. This permits the generation of accurate reports, which are necessary to prepare various government returns (e.g. for Goods and Services Taxes). Accurate reports also permit better management of, and profitability from business. Here are some good habits relating to paying your bills.
1. Minimize paying any bills with hard cash. If you must pay some bills this way, keep these bills separate from all others. Write a code on each bill; Cash, PaidCash or PC. Also write an abbreviated date of payment (e.g. 0515 for May 15). Try to make all payments by check, or debit/credit card.
2. Use only one or at most two credit cards for business payments. Minimize paying personal expenses on this card.
3. Keep all bills received but still to be paid in a separate folder. When a check is prepared, write the check number (e.g. Ch257) on the corresponding bill. If a bill is paid through the Iternet, write a pertinent code (e.g. IntNet) on the bill. Also write date of payment. After a check is written or payment is made on the Internet, transfer the corresponding bill to the folder for that vendor.
4. For small amount bills paid by cash, prepare a brief list of all expenses in the sequence the bills are stacked. Then write a check for the total amount payable to the person responsible for managing the company’s petty cash. Write the check number on each bill in the stack. Prepare an expense list everytime some 20 bills are accumulated, but never wait more than a month. The bills should be sequenced in such a way that the stack looks neat.
5. If some personal expense is paid through the business account, write a code (e.g. P) next to the amount on the credit card or bank statement.