Year End Checklist For Small Business Bookkeeping

Read through for in-depth coverage of your required tasks, or skip to the end to see a handy infographic to use as a visual checklist. As a business owner, your goal is to generate positive cash flow. Each week, you should check-in with yourself to assess how well you’re performing in this regard. You should also try to forecast what your cash flow will look like for the following week.

In addition to the tasks you’ll have to complete each month, there are also some tasks you’ll need to complete each quarter. Use good internal controls by having two people count all cash and sign the deposit slip. Plus, verify the deposit slip matches the amount entered in the bookkeeping. One of the few online places that will cheerfully accept your order by phone or mail as well as through their website, and email you a proof if you use custom artwork on your checks. They’re in Portland, ME, so shipping to Massachusetts is usually just a few days; unless you’re in a real hurry there’s no need to pay for overnight shipping.

These financial statements can include a general ledger, a profit and loss statement, and a business balance sheet. Reviewing financial statements often helps a business owner from overspending on unnecessary or unpopular times and prevent financial challenges in the future.

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This report helps you understand your company’s performance. It is especially important in construction, manufacturing, and wholesale businesses. That’s a long list of reports, and it’s time-consuming to keep up and review! But the review gives you the best way to evaluate your business status and trends that may have an influence on your business’s future.

Profit & Loss Statement – In addition to your balance sheet, you should also complete a Profit & Loss Statement (also known as a P&L Statement or Income Statement) each month. This will show you how much money you made for the month and may be a record-keeping requirement depending on your business structure. These are the most important bookkeeping tasks that I take care of each month. If you’ve hired an accountant, they should be able to do some of this for you. If you’re a do-it-yourselfer like me, you’ve got to make sure to take care of all of this on your own.

A best practice is to actually have another person review all of your work with fresh eyes to attempt to find any possible errors and ensure the accuracy of the entire month-end report. Based on the revenue and expense data retrieved from different departments, the bookkeeper needs to prepare a proper revenue and expense account. With this account, bookkeepers can predict revenue generation rates, control expenses, and take timely measurements to manage monetary resources. A bookkeeper has to establish an open communication environment for colleagues and clients. Bookkeepers have to communicate with other employees to manage travel expenses, reimburse employee’s expenditures, petty cash reconciliation, and more. If you want to make sure your inventory is correct, you need to perform monthly inventory counts. Counting your inventory monthly allows you to accurately record inventory levels in your books at month-end.

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Taxes are a nuisance, but they’re killer if you put them off. It is simply your accounts receivables report sorted by the length of time each invoice has been outstanding. Your customer’s ability to pay and pay on time is important to your company’s financial health.

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A Small Business Owners Bookkeeping Checklist

After tracking your transactions, record them in your books at the end of each week or month. During your monthly close, cross-check your records to make sure you paid all bills and invoices.

One simple tip to keep your business financials updated is to do at least one thing every week. With morale being a big part of practice management, this article tackles key insights that come up monthly bookkeeping checklist in post-tax season meetings and offers suggestions to overcome them next season. Your CPA might file your 1099s for you, but I highly recommend that you start gathering W9s now while you can!

Can align an organization’s resources properly by daily recording sales and purchase transactions. Without failing, bookkeepers have to record business transactions into the designated accounting software to know exact cash inflow and outflow numbers. That way, you’re not scrambling at month-end looking for documents. One way to stay organized is by using basic accounting software to track your transactions and store your reports. Chances are, you probably don’t have time to record transactions every day.

It’s also a good time to review pending transactions for any errors or abnormalities, so you can investigate potential issues promptly. This detailed template outlines complete monthly bookkeeping steps including weekly bookkeeping, bi-weekly payroll, gathering documents, adjustments, reports, and review. Split into seven sections, it includes critical details for each step including task owner, duration and due date. This allows you to compare the budget or prior period financial statements to watch for any errors or unusual balances. Review the income statement accounts for anything that looks off based on the preceding period and significant account balances that look out of place.

• If you run a seasonal business, cash flow goals are even more important so you can thrive during and after peak business periods.
• If I run into any snags or problems that will take me longer, then I can still know on average the time that it will take me to do any given task.
• If a particular material moves quickly, replenish the inventory item more regularly to keep pace with the product’s demand.
• Along the top of the spreadsheet are the months so I can easily see and check off that I’ve done everything I needed to that month for my client.
• One of the most important jobs of a new business owner is learning to keep accurate books.

Your calendar can help you prepare for closing your books for the next month. And, your calendar can help you avoid falling behind on your books. At month-end close, review your revenue and expense accounts to confirm they are accurate. Check to see if you recorded your expenses in the correct accounts for the period. Be sure that accruals and prepaid expenses are recorded accurately in your books. Accounting software gives real-time visibility into finances to better manage cash flow and make better decisions when it comes to operations. And when it’s tax time, having software helps the business accurately identify tax amounts to decrease the taxable income rate, leaving more cash to invest in the people and the business.

Bookkeeping

After reviewing it, send out any reminders that need to go out. Look at each of these reports monthly, if not more frequently, both on your own and in conjunction with your financial team to keep your business on track. Make sure you gather all that information at the end of the year and have it ready to pass off to your accountant. As soon as you receive payments from customers, record them immediately in your bookkeeping software.

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Distributions – Depending on how your business is structured, you may wish to take distributions as a supplement to your regular paycheck. We choose to take quarterly distributions, in line with how C-Corporations elect to pay out quarterly dividends. However, you should make sure to speak to an accountant about the size of your distributions and how often you should them.

• A secure and updated website is critical for your business’ reputation and can impact your revenue.
• During my time as a bookkeeper, I have learned that CPAs love it when each transaction has a vendor name attached to it.
• Smooth communication with clients is a big part of your success as an interior design firm.
• This is especially important once you reach the end of the calendar year and enter tax season.
• To keep on top of your monthly accounting responsibilities and cut down on time spent closing your books, create a monthly financial calendar.
• Suppose your small business is located in any of the 45 states that collect statewide sales tax or in the District of Columbia.

This list has been helpful for me to keep up-to-date and on track with my client’s books. If you’re new to bookkeeping checklists, this is a great place to start your journey towards being more efficient. If you already have a checklist going, then you’ll surely find some gems to add to it below. Here are the most important monthly bookkeeping tasks to add to your bookkeeping checklist. FreshBooks is used for keeping track of client data, invoices, and income.

Make Quarterly Income Tax Payments

I need to wait on my client to give me the information for this task, so it doesn’t always happen as step four. My client wants to record how much money each person in the firm is making, and that is tracked on the profit and loss statement. They have a book where they record all that information, and then it comes to me, and I put it into QuickBooks. There are income tax payments that you need to make every quarter.

You may find that you’ve received retainer deposits that you’ve not applied to a client invoice, or you may only have used a part of the deposit. An open client deposit report will point this out so you can calculate your revenue with more accuracy and better manage the client’s funds. Suppose your small business is located in any of the 45 states that collect statewide sales tax or in the District of Columbia. With so many tasks competing for your attention, it can be especially difficult to maintain your quality of work. And for your staff performing bookkeeping, consistency is another goal that can be hard to reach. Take yourself on a weekly money date and have fun with it!

Reconciling accounts is critical to ensure that no transactions are missed, and everything is recorded correctly. Particularly bank account reconciliation, such as for chequing and savings accounts to ensure all transactions are recorded.

Needless to say, paying your employees is extremely important. But it goes beyond issuing the payments because the records need to support the payments.

Reconcile your bank accounts- this step is important to make sure that transactions cleared the bank for the correct amount and to ensure that there aren’t any duplicated entries or other errors. It is important to make sure that your books are up to date. This not only makes tax preparation a breeze, but it also gives you important insight on the health of your business. Without accurate books you can’t tell if you are making a profit, spending too much on overhead or have customers that owe you money. Before you make the decision that your books for the month are complete, take time to do a final review.

If this step is not already automated, you will need to collect these from your client or directly from the financial institutions if you have access. This can be very time-consuming each month and is necessary for completing the month-end reconciliation.

Author: Donna Fuscaldo