Without receiving remuneration for your services, you’re running a charity rather than a business. Which, while admirable, won’t put food on the table for you and all your staff. Accounting is vital to the health of a business and too many companies overlook it.
Key Month-End Tasks to Include in Your Checklist
The CRA requires that all small businesses that earn more than $30,000 make HST/GST payments. But CRA rules state that you must change your HST/GST reporting period if you experience an increase in sales and taxable supplies. While you’re at it, identify trouble spots, and make adjustments to improve sales and margins.
- Plus, it ensures you maintain a good relationship with your suppliers.
- Learn how to navigate UK & EU VAT rules, avoid common pitfalls, and streamline your accounting.
- The accounts receivable (AR) ledger is the opposite of accounts payable.
Review sales tax and make quarterly payments
It is there to report the total amounts of money a company has earned and spent over a specified period of time. A large part of accounting is simply double checking your own work or the work of other people what is a debit and credit bookkeeping basics explained to find and correct mistakes. This is why so many accounting procedures seem complicated; you’re being asked to do the same calculations in many different ways.
By closely monitoring your cash reserves, you can grow your cash flow more effectively and avoid pitfalls. Or maybe your accountancy department is already top-notch and requires zero improvements? In which case, check out these other template packs to help your other departments and business processes. Find out how to integrate Process Street with the apps you use every day, inventory account: adjustment type affect like Quickbooks for generating invoices or Freshbooks for organizing expenses. If you’re starting off in business, you might not know how much tax you have to pay or what you’re paying that tax for.
Reconcile the Accounts Receivable Balance
The goal is to identify any trouble areas and make adjustments that will help the business be more profitable. This process typically involves reconciling your bank accounts, reviewing all entries for accuracy, and closing out the books for the month. This task includes verifying bills from vendors and ensuring their accuracy. Other accounts payable forms involve paying for digital services, like hosting or software subscriptions.
A cash flow statement will clarify where you stand so you can confidently pay your immediate bills and plan for future expenses. Accounting software allows you to generate cash flow statements easily. To get a better handle on managing cash flow, and other small business financial management essentials click here. Use your accounting software to prepare your customer invoices and send them out. By now, you’ve likely established your payment terms so verify the terms of each client before sending to ensure you’re applying the correct due dates.
Another essential part of your new business accounting checklist is tracking your business expenses. Review your current inventory to determine the value of items not sold. Any write-down of inventory translates to a deduction on your year-end taxes. If you do not write down unsellable inventory, you are overstating your inventory balance and paying additional taxes that you don’t owe.
The requirements of small business accounting come down to a handful of best practices and essential reports, which you can do manually or with accounting software. Other accounting services small businesses may use include bookkeeping, strategic finance, and tax accounting. While accounting may not be what motivates you to go to work every day, it’s likely something you’ll encounter whether you do it yourself or outsource to an accounting firm. There are weekly, monthly, quarterly, and annual accounting tasks you need to complete to ensure your business’s success.
Use your accounting software platform to verify your balances and get a handle on your cash position each day. Monitoring your accounts receivable will also include tracking payment gateways to ensure transactions are processed correctly and following up on any late payments or chargebacks. Review the payroll summary before payments are disbursed to avoid making corrections during the next payroll period. Just as you reconcile your personal checking account, you need to know that your cash business transaction entries are accurate and that you are working with the correct cash position. Reconciling your cash makes it easier to discover and correct any errors or omissions — either by you or by the bank — in time to correct them. Many accounting software programs have apps to help you and your employees fill out expense reports and integrations with receipt-tracking software.
Set a time each month to do an inventory count and review in detail what has sold and what hasn’t in the past month. Discover how Receive is revolutionizing e-commerce cash flow and eliminating payout delays ⎯ zero fees, zero interest, and zero credit impact. Learn how to navigate UK & EU VAT rules, avoid common pitfalls, and streamline your accounting. Basic requirements for bookkeeping accrued income include accurate record-keeping, organized documentation, regular reconciliation, and compliance with financial regulations.
