2. Records Evaluation

1. Does the client (do you) have a separate checking account for their (your) business?

2. Does the client (do you) have one or more dedicated credit cards only used for their (your) business?

3. Does the client (do you) use one checking account for business and non-business items or one checking account for multiple businesses and for personal items?

4. Does the client (do you) often use the same credit card for personal and business expenses?

5. Does the client (do you) have a system for keeping original receipts or keeping electronic copies of original receipts?

6. Does the client (do you) have a system for recording business miles driven in their (your) personal vehicle?

7. Does the client (do you) have a system for recording each financial transaction with a notation explaining what it was for, or in a system that will correctly group the transaction with other transactions of the same type? (Does not need to be a formal bookkeeping system, could be a manual system or a spreadsheet system)

8. Does the client have a system and practice for reviewing bank statements and credit card statements each month and comparing what is recorded on the statements to what they have recorded in their system? (Does not need to be a formal bank or credit card reconciliation but does involve actively reading each statement each month.)

9. Does the client (do you) keep a list of assets used in the business?

10. Does the client (do you) make sales on account (allows the customer to pay later)?

11. Does the client (do you) have a system for reviewing accounts receivable to identify slow-paying customers and record when payments are received?

12. Does the client (do you) have a system and practice for reconciling bank and credit card statements each month? A formal reconciliation is a mathematical proof that every transaction recorded by the financial institution is recorded in the accounting system and every transaction recorded in the accounting system is either also recorded by the financial institution or can be explained as a cash transaction, uncashed check, etc.

Grand Total

Results

Lesson #2 (Record Training) is recommended.

Results

Lesson #2 may still be of value if the client (if you) want to learn more about what records the IRS requires and how long to keep records.

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