Accurate Bookkeeping

Decent Essays
In a formal probate process, accurate bookkeeping is crucial. As an executor, you must provide a final accounting of the estate and have it approved by all the beneficiaries in order to close the estate. Since, in some states, the formal probate process can take a year or more to close an estate, sloppy bookkeeping can hold up the final accounting stage if a discrepancy occurs. Therefore, to avoid holdups, you must develop a reliable bookkeeping system.

How to Set Up an Accurate Bookkeeping System

Develop a bookkeeping system that makes sense to you and use technology, if possible. There are no rules in how to set up a bookkeeping system but make sure the bookkeeping system you create has the following components:

• Track the transactions
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However, keep an eye out for transactions that are combined. Here are a couple common transactions that could trip up any bookkeeping system:

• A sale of a home. Usually, the proceeds you receive from a sale of a home has the expenses of the sale deducted from the check. It’s perfectly normal to deposit that check into the estate account without recording the expenses. So, the income side of the transaction will be correct, but you will be missing expenses that will cause a discrepancy in the final accounting. Make sure you enter the expenses that were deducted from the proceeds of the sale into the manual record and the automated record.

• Completing a deposit of multiple checks on one deposit slip. When you deposit multiple checks on one deposit slip you will receive a receipt for the total of all those checks. In the final accounting, each type of income is reported separately. So, if you deposit multiple checks consisting of a rent check, dividend check, and a check you received from closing an account, that’s three separate categories of income in the final accounting. You must record each check separately either in your journal or the manual record so you will have a reference as to what income type you received for each check. This will avoid confusion in the final
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