Accounting Done Timely: an accounting checklist for small businesses

When you are running a business your attention gets pulled in many directions leaving you always stretched for time. But in the midst of all that if you don’t pay a little attention to properly maintaining your accounts and book-keeping, it will come back to bite you hard.

If you are a tad careful taking measures to keep your accounting up-to date, you won’t have to plod through it tediously when you are faced with daunting deadlines and other financial challenges.

In fact, managing your business finances, and thereby you accounting tasks, doesn’t at all have to be a dull and tedious grind. If you plan realistically, maintain you books, review the results, keep to the budget, and get familiar with your financial reports (balance sheet, income statement and cash flow statement), you will be quite sorted.

The game plan is to split the accounting tasks into different timelines and prioritise. This blog categorizes tasks that should be done on a day-to-day basis, those to be done yearly, and everything in between.

The key is simple: accounting done timely.

I. Things to do everyday

  1. Track your cash
    To put it plainly, without money your business is doomed. Every day you need to know how much money you have in the till. This helps you decide where you need to curb on your finances and where you are doing ok. Knowing your cash position is the only way to manage active cash and gauge weekly cash commitments.
  2. Record transactions, document and file
    For money that needs to come in a little later or doesn’t need to go out immediately, chances are you will forget what goes where and when unless you have it put down on paper. At the end of each day it is imperative that your bills, invoices and other AR/AP reports are noted systematically. Even if you note it down simply on software like Excel, or scan the receipts directly into your system it will be helpful. By doing this, bank reconciliations tally-up better and without strained efforts to make it add-up. The only thing worse than having unaccounted money for the loss of a receipt is saving receipts and invoices in a shoe box for later.

II. Once a week you have to check..

  1. Who didn’t pay you, who didn’t you pay?
    With the daily reports, at the end of the week you will have an understanding of outstanding payments – payable or receivable. Review these, pay off the ones you need to, sign off cheques, prepare invoices and notify vendors who owe you money.
  1. Extrapolate cash flows for the following week
    Each week’s demands vary, so there is no fool-proof method of predicting a penny-for-penny cash flow. However, each week’s demands can’t vary so wildly that you can’t foresee to an extent the expenses you will incur. You know what your scene was this week, use that experience to plan and budget better for the following one.

III. This one could be a fortnightly or monthly task

  1. Process payrolls
    This is the one thing you can predict with certainty will come back around every month at the same time. So be prepared to imburse it correctly. That means, review the payroll and ensure applicable income tax or other source-deductible taxes are appropriated. Adjusting incorrect calculations in the following month are not just difficult but also reflect badly on your company.

IV. The month’s consolidations

  1. Complete bank reconciliations
    This shouldn’t be too discrepant if your daily and weekly book-keeping has been maintained accurately. As important as this is for the bank, it is for you too, as incorrect entries only serve misappropriated ideas of your available cash.
  1. Review aged receivables and payables
    The end of the month is a good time to ascertain what needs to come to you or go to vendors. It’s also a good time to remind clients or customers about the monies owed and pay off balances. Having a separate list of aged receivables and payables helps keep tabs of them at a quick glance.
  1. The facts displayed
    The financial statement will be a corroboration of all the documenting and accounting you have done and declare the verdict on your finances for the month. This is very important. It is the baring of facts for the moment of truth which will help you determine your path going forward and point out places to avoid inaccuracies.
  1. What you ended up doing vs. What you planned
    Budgets try to gauge the pecuniary anticipations for the month and also offer a POA. How closely you stay the path or how far you have been pushed off course will reflect in your financial statements. Studying this and understanding your patterns will help you correct more obvious straying tendencies.

V. At every trimester

  1. Sales & Income Tax
    Just like you maintain payrolls, you need to keep-up with your own tax and the business’. Being meticulous at this point is a good idea or the repercussions are bound to felt keenly at the end of the year. This money that is owed to the government must be adjusted or accommodated for at regular intervals of 3 months to avoid a penalising deathblow at the end of 12.

VI. A dozen months of accounting

  1. Financial statement
    This is a tough time in the year but it can’t be too daunting if you’ve been a good book-keeper through the year. This rounding-up and summing-off of all the months’ finances is a coalescence of data that serves as a conduit for intelligence on how you have run your finances and will inform your empirical knowledge of your business.
  1. File the tax, fill out W-2 & 1099 forms
    This is quite a straightforward point that is usually carried out begrudgingly. But once it is done and dusted we assure you the relief of having it lifted is enormously satisfying.
  1. Budgets
    Now that everything has been done, before filing it away to collect dust, re-review the aged receivables and payables, look closely at the overall handling of expenses and finances, take stock of your inventory, and this time round use your years’ experience to plan better and more pragmatic budgets for the next fiscal year!

If you stay abreast with this schedule, your accounting will be a soundless well-oiled machine, and your business will soar!


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