The building blocks of accountancy.

Susan Hutter continues with her A–Z of top tips. This month she turns to ‘H’.

is for house-keeping

In this context, ‘housekeeping’ relates to business housekeeping. 

Book-keeping 

For many independent practitioners, there is a tendency to get the practice records written up only once a year, just before the practice accounts are required for filing. 

But I recommend more frequent book-keeping and reconciliations. Writing up and reconciling a practice’s records only once a year and, say, six months after the year-end is mostly time-consuming and therefore costly.

Usually, many queries will arise, and as the transactions themselves happened a long time previously – in some cases, over a year ago – the doctor and their support staff often will not remember the reasons for a particular transaction. This makes it difficult to prepare and finalise the practice accounts. 

Another downside is that without frequent book-keeping and reconciliations, a practice will often fall behind in debt collection, which puts the cash flow at risk.