An efficient system for handling business finances is at the heart of every successful business, whether it is an accounting firm or any other small company. Finance planning problems make up 66% of the most common reasons for start-up failure.
While bookkeeping may be the lowest tier for accounting and financial management, it is one of the most important elements because it is the building block for all other financial aspects of the business. It’s important to have an efficient bookkeeping system in place if you want your firm or business to grow and succeed.
Solid bookkeeping practice is fundamental, but can also be overwhelming, even for those who specialize in it. Keeping financial records accurate and up-to-date involves a multitude of tasks. If you get behind, it derails your whole financial system, not to mention your business.
That’s why it’s crucial to stay on top of bookkeeping tasks for up-to-date snapshots of the health of your business at any given time.
Having a well-defined bookkeeping workflow, whether you manage your own business or you’re looking for a good checklist of items to serve your bookkeeping clients better, will help ensure that financial information is in order, deadlines are being met, cash flow is accurate, and nothing is falling through the cracks.
The most efficient bookkeepers perform tasks daily, weekly, monthly, quarterly, and annual.
21 Things You Should Include as Part of Your Bookkeeping Checklist
Daily Bookkeeping Tasks
- Review cash position. At the beginning and end of each day, you should check business bank account balances and petty cash to ensure enough money is on hand for making change for walk-in clients who are making payments for your services or to be used for last-minute small office supplies such as stamps.
- Record and categorize all incoming and outgoing payments. Record every transaction for the day. These transactions include all money received for services and all money paid out for the day.
- Make deposits. Deposit all cash at the end of the day and record the deposit.
Weekly Bookkeeping Tasks
- Prepare and send invoices. Send out any invoices for the week. Make sure to include a due date, which is beneficial when forecasting revenue.
- Pay vendors. Review your accounts payable and pay your suppliers on time to avoid late fees. Make payments early if possible, especially if the vendor offers an early payment discount.
- Filing. File a copy of all invoices sent, cash payments, and cash receipts with a physical file or scan into bookkeeping software. These organized files will make it much easier when it’s time to do taxes.
- Review projected cash flow. Be sure to have a statement in place that shows your current cash flow and expected cash payments & cash receipts. Make sure you have enough money reserved to pay employees, bills, and vendors in the coming weeks and months.
Monthly Bookkeeping Tasks
- Balance and reconcile business accounts. You need to make sure you are working with an accurate cash flow balance. Reconciling your statements every month allows you to catch errors made by either you or the bank before it snowballs into a larger issue that’s harder to untangle.
- Process payroll. You may pay your employees at the end of the month or twice a month.
- Approve tax payments. There are specific payroll tax requirements to federal, state, and local agencies that the business must meet. You will need to withhold, report, and deposit Social Security, Medicare, income and disability taxes on their due dates.
- Check inventory status. Check the inventory of your office supplies every month, especially before peak times at the firm.
- Review past due receivables. Review your aging column or report by the days past due so you can note the amount of outstanding customer payments. Send overdue statements or reminders, preferably at the beginning of the month, to anyone who owes you money.
- Compare your income statement to your budget. Review your income statement for the current month and year to date and compare it to your monthly budget to see how the numbers compare. Consider making adjustments in the following months if necessary. If you don’t have a budget, compare the income statement to the prior year’s.
- Review balance sheet. By comparing the month-end balance sheet to one from a prior period, you can note how your asset and liability management is going and if any adjustments are needed.
Quarterly Bookkeeping Tasks
- Revise annual income forecast. Review revenue and expenses to note any trouble spots and make changes if needed to increase sales.
- Quarterly payroll reports. The IRS and some states require quarterly payments and payroll reports. Make sure these are filed and paid.
- Quarterly sales tax. Some states also require sales tax, even for accounting services. Ensure that if you operate a business in one of these states, the quarterly sales tax requirements are met.
- Other taxes. Check to see if you owe a gross receipts tax or a business and occupation tax. These taxes affect accounting services in some states.
- Estimated taxes. Review your income statement to evaluate if you owe any state or federal estimated tax payments due every quarter.
Annual Bookkeeping Tasks
- Review past due accounts. Just as you did every month, you need to review outstanding customer payments and past due invoices to determine if you will continue to issue reminder notices, send them to a collection agency, or write them off.
- Review office supplies and services. Review services to see if you want to change any plans for the next year to save money and do an inventory of office supplies to see if you can save money by buying in bulk.
- Issue W-2 and 1099’s. W-2’s and 1099’s need to be sent out to employees and independent contractors reflecting their annual earnings. These forms are to be mailed by January 31st. Contractors who earn less than $600 do not need a 1099.
- Review financial reports for tax returns. Review all financial reports before year-end taxes are processed.
Free Template - Bookkeeping Checklist
If you’re looking for simple workflow templates to stay on top of your bookkeeping checklist, you can download one for free here. You’ll also get 31 other free accounting workflow templates to help you run your business