No small business owner has time to waste, so when entering data into spreadsheets we must be as careful as possible. But we are all human and we make mistakes no matter how careful we are. This is why your easy bookkeeping system needs to be light and airy when it comes to correcting errors. It should not take any longer to fix the spreadsheet error than it did to enter the wrong number, if you ask me. In the Big E-Z Bookkeeping System, it is super simple to correct errors. You open the file that contains the error, remove the wrong number, enter the correct number, and you are done.
But how do you know you made a bookkeeping error in the first place? By reconciling your bookkeeping records, of course. When you reconcile your bookkeeping records against the bank statement and your numbers don’t match, you may have incorrectly entered an amount in the bookkeeping spreadsheet. Here is a link to my newest video tutorial for how to reconcile your checkbook using Big E-Z Bookkeeping.
Here is a simple bookkeeping trick to find transposition errors. Divide the number you are off by 9. If it’s divisible by 9, then you know it’s a transposition error. For example, let’s say you are off by $27: this means you may have entered $803 instead of $830.
If your error was not transposed, then youentered in the wrong amount. Let’s say you entered the amount as $13.05 and it should have been $13.06. It happens. Tell me about it. I spent 25 years working as a bookkeeper. I know! The only way to find this type of error is by doing a double-check. This is time-consuming, but I always find my error the second time around. So let’s say you checked off all your deposits against the deposits which the bank shows you made; and you checked off all the checks, debits and transfers against the ones the bank shows and you are still out of balance. The next step is to double-check everything one more time.
If it is late in the evening and I’m tired, I usually wait until the morning to do my double check my bank account records. But I always find my bookkeeping error the second time around.
Lastly, you might have a rounding error. This is a problem whenever you deal with percentages. As long as your system has a quick and easy way to correct rounding errors, it should take only a minute to fix. In the Big E-Z System, there is a special place to account for the amount of pennies you are off.
Big E-Z bookkeeping software is a set of easy-to-use spreadsheets perfect to help individuals, non-profits and small businesses manage their finances and easily prepare for tax season.
Have you come across another type of error I’m not aware of? Or do you have a tip to help catch bookkeeping errors. Write me and tell me about it.
Tags: 2012 Big E-Z Bookkeeping System, balance my checkbook, bookkeeping tips, how to catch bookkeeping errors, Microsoft excel spreadsheet template, reconcile my check book