For many business owners accounting is a necessary but painful business function. Most business owners would much rather be focused on the core service of the business than reviewing numbers, but those reviews are crucial to the success of the business…and crucial to keeping your stress levels in check at the end of the year. Without routine financial practices, business owners would have trouble meeting their payroll, billing, and tax obligations. They would have a hard time planning for the future too.
To make the job less painful, we’ve compiled a small business accounting checklist. This checklist will help you understand what needs to be done and when. This will keep you from worrying about it unnecessarily which could draw your attention from other equally as important business matters.
Your Small Business Accounting Checklist
One thing you can say about accounting – it is a routine function. Establish good habits and use the routines of accounting to your advantage by establishing a checklist that follows the annual business cycle. This will keep you on top of your financial obligations all year round, ensuring you don’t miss a thing.
_____ Check your cash position. How much do you have on hand? Do you need to make a run to the bank before opening for the day?
_____ Take a look at incoming and outgoing payments. What’s on tap for the day? Is everything ready to go or is there work to be done?
- Weekly or Bi-Weekly
_____ Record payments received from customers and made to vendors.
_____ Record invoices or bills sent out to customers.
_____ Organize and file receipts and invoices. What has been paid? What’s still unpaid? _____ Process payroll.
_____ Evaluate cash flow.
Keeping on top of these functions every week will make the process a lot easier to handle. The organization and time you put in to it now, will pay off when tax season rolls around.
_____ Reconcile your checking account to make sure your internal balances match the bank balance.
_____ Check for past-due invoices (aged receivables) and send out reminder notices at the beginning of the month. Doing this all at one time will help you manage the process and keep track of who has been contacted and when.
_____ Check inventory. The beginning or end of the month is also a good time to check your inventory and place new orders if necessary.
_____ File payroll taxes.
_____ Review monthly balance sheet. Do line items add up? Is anything glaringly wrong? What does your cash position look like?
Every quarter it’s a smart idea to take a deeper look at how your business is faring so you can make plans and adjustments if needed.
_____ Review Profit and Loss Statements for the quarter and compare it against the budget.
_____ Process quarterly payroll, sales, and income tax payments.
_____ Review aged receivables and send to collections if necessary.
_____ Conduct year-end inventory status and analysis.
_____ Complete IRS forms.
_____ Review year-end financial reports.
_____ Review tax returns and books before giving them to your accountant.
While the list may look overwhelming, doing it a little bit at a time, like we’ve broken it up, makes things easier. An accountant or even accounting software can make all of these processes even more manageable. For small businesses with uncomplicated transactions, you can probably manage the processes yourself with the right software, if you’re so inclined. For other business owners, it is well worth the cost of hiring an accountant to do the job to ensure it is done correctly, on-time, and accurately. It could also save you the time and stress from doing it on your own.
Contact Crowne Atlantic Business Brokers Business Brokers For Help With Your Business Needs
If you want to buy or sell a business or need advice on how to find an accountant, contact the business brokers at Crowne Atlantic Business Brokers at 407-478-4101.