What’s more, Link My Books simplifies your payouts by breaking down everything from sales to taxes, providing a withholding allowance definition clearer view of your profitability and ROI. In business, staying on top of your finances is central to your success. However, 60% of small business owners feel they lack accounting knowledge, often leading to inaccurate records, missed deadlines, and unnecessary stress. If your taxable supplies reach more than $1.5 million you must switch to quarterly reporting, and if they exceed $6 million, you must switch to monthly reporting. Whether you have a seasoned or new business, brick and mortar or eCommerce, there are numerous monthly accounting tasks you need to handle. The following accounting checklist lays out a recommended timeline for the accounting functions that will show the state of your business and streamline your tax preparation.
Creating a month-end close checklist from scratch can be a tedious task. That’s why we put together a free and easy-to-use template for you here, which also includes 31 other customizable accounting how to calculate cost of goods sold workflow templates and checklists. Once you execute this process, you lock or mark the period as completed, ensuring no other transactions can be performed. Because the period-end process has many moving parts, a checklist becomes a vital tool. But if you open a business account, you can organise all your expenses and earnings in one place. But what do you need to set up strong accounting practices from the start?
These statements are prepared based on the records maintained throughout the year, and their effectiveness depends on the accuracy of those accounts. This practice can help you avoid the issue of unauthorized overtime pay. If an employee works more than 40 hours a week, you can be held liable to pay for overtime even if you didn’t authorize it. We collaborate with business-to-business vendors, connecting them with potential buyers. In some cases, we earn commissions when sales are made through our referrals. These financial relationships support our content but do not dictate our recommendations.
Most jurisdictions require that tax returns be filed, and liabilities be paid, on a monthly or quarterly basis. Filing is a relatively simple process; however, it’s always a good idea to consult with your accountant regarding tax issues. Payment dates don’t always coincide with the timing that you’ve established to four temperaments pay your employees.
File tax returns
Keep copies of all invoices sent, all cash receipts (cash, cheque, and credit card deposits), and all cash payments (cash, cheques, credit card statements, etc.). Welcome to your weekly accounting tasks, otherwise known as the land of invoicing, financial data management, and other business bank account fun. That’s where reconciling a loan ledger to the balance in the statement comes in. The process will allow you to stay on top of loans and interest repayments, ensuring you are reporting the correct liabilities of the business.
Checklists to Optimize Your Accounting Processes
- However, you must also be flexible and update your checklist should any business or regulatory changes arise.
- This checklist points you to all the different factors you need to take into consideration when compiling your business tax return.
- That way, you can focus on scaling your business while keeping your finances in order.
- There are three main pillars of business accounting reports and one of them is your income statement, otherwise known as a profit and loss statement.
This process ensures the impact of such a transaction reflects on financial statements, such as the balance sheet, cash flow statement, and income statement. All you need is a simple statement showing your current cash position, expected cash receipts during the next week/month and expected cash payments during the next week/month. To download a free customizable cash flow statement template, click here. Record each transaction (billing customers, receiving cash from customers, paying vendors, etc.) in the proper account daily or weekly, depending on volume. Although recording transactions manually or in Excel sheets is acceptable, it is probably easier to use accounting software like QuickBooks.
While you may be an expert at marketing or operations, don’t underestimate the importance of small business accounting. Without a clear financial picture, it can be difficult to move your business forward. It’s a lot to navigate—and if you want to stay on top of all your accounting tasks (and stay on top of them at the right time), having a checklist can help.
Analyze Inventory Status
In most states, you’re required to file sales tax returns and pay each month if you have a high volume of sales. Since laws vary between states, check with yours to determine what that volume of sales must be. And, of course, it’s always a good idea to consult with your accountant when it comes to taxes. Aged receivables are payments on invoices that are overdue from customers. Similarly, aged payables are payments that you owe other companies for products or services.
Understanding your existing cash position allows you to make immediate spending decisions. Your accounting software will show you any outstanding invoices, and their totals. We’ve developed the accounting checklist with tasks for each day, week, and month. Simply consult the checklist on a regular basis, and you’ll be a small business accounting guru before you know it.
Check each of these tasks off of your bookkeeping checklist
Significant changes in the balance sheet line items indicate incorrect or missed postings. It could also signal trouble in your business, especially if the liabilities balance has increased significantly, exposing the company during a downturn. Next, investigate any discrepancies and post relevant journal entries to correct the errors. You can also process payments for overdue supplier payments you might have missed during the month.