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10 Essential Accounting Tasks for Businesses

Businesses

Maintaining accurate records may be one of your least favorite aspects of running a business unless you own an accounting or bookkeeping businesses. However, it is necessary to keep accurate accounting records to avoid late payments and cash or inventory shortages. More importantly, a properly maintained financial statement shows your business’s profitability and losses.

Your business can run smoothly by performing specific daily, weekly, and monthly bookkeeping tasks to identify problems and discrepancies. Whether your company has an in-house bookkeeper or outsources accounting services, these are some of the basic tasks that need to be done.

  1. Keep a record of transactions

It is common for businesses to make small transactions each day and take large payments a little less often. Either way, payments should be recorded as soon as possible after receiving them, whether in cash or via bank transfer. Keep your cash and checks in the bank, soyour accounts are in order.

2. Competent review

It is essential to appoint competent and trained accountants to avoid fraud and errors. A company’s accounts cannot be mistake-free unless it is reviewed daily. Therefore, companies should appoint a qualified accountant to maintain complete and compliant financial records.

Hire someone with good background and encourage them to continue taking certifications such as CPA, etc., for their development. Many online platforms, such as Wiley Efficient Learning, have given proven results, helping students pass their exams without having to attend physical classes every day.

  1. Regularly update financial data

You may get inaccurate results if you skip reviewing your income and expenditure totals for several weeks. Regularly updating your financial data is therefore essential. Manually updating your data every day avoids spotting inaccuracies or issues. You can also use accounting software packages for this purpose, making the task much easier. For more information about financial advice head over to Liston Newton Advisory.

  1. Review the cash position

Every business relies on cash flow to survive. Therefore, you must know how much money is coming in and going out of the company. A log can be used to keep track of daily sales and expenditures. Check the cash you have on hand at the start of the day. Also, be aware of the amount you expect to receive and pay in the upcoming week/month.

  1. Inventory management

Inventory value must be determined for accounting purposes by every company that sells physical goods. This asset enables planning and meeting budgets. The ability to meet client orders depends on inventory, especially for manufacturers. A company that fails to maintain accurate inventory records will not be able to deliver an item on time or even close to the deadline.

  1. Record and pay bills

All incoming invoices must be reviewed and entered into the accounting systems. To help avoid errors when balancing your books, keep all receipts and other relevant documents. Each supplier should be listed along with their billing dates, amounts due, and payment due dates. If you have the cash available, you may want to take advantage of discounts suppliers offer for early payments.

  1. Payroll and timesheet processing

When you own a business with many employees, you must determine when and how often to pay them. As money is required to make payroll, the timeline for making payroll is typically influenced by the organization’s cash flow. By establishing a payroll timeline, you can better manage your business’s cash flow and set the right expectations for your employees.

  1. Check for past-due receivables (aged receivables)

Include a column for “aging” to indicate the number of days a bill has been past due. Using this tool, you can quickly view outstanding customer payments. Customers, clients, and anyone else who owes you money should receive overdue reminder statements at the beginning of each month. To determine what receivables you should send to collections or write off for a deduction, you will be reviewing this account again at the end of the financial year.

  1. Identify unpaid bills

Identify the bills due next and plan how to pay them. The accounts payable (AP) aging report in an accounting system can be used to track money owed and due dates similarly to the AR aging report. Before payment, employees should reconcile invoices with purchase orders and ensure that goods have been received (i.e., three-way match). For fraud prevention, make sure different people cut and sign the checks.

  1. Book-balancing

A financial professional should review and reconcile all bank and credit card accounts at the end of each month. All the revenue and expenses are tracked and recorded properly, and the business is not overspending. Confirm that the bank statement, checkbook, and general ledger reflect the same information. To ensure the checkbook reflects all bank charges and the correct balance in the checking account, check the balance and correct any errors in the checkbook and books.

11. Update your financial data

If you use accounting software, it will automatically sync up with your businesses bank account and credit cards, as well as with sales data from your point of sale. If you log in to your accounting software each morning, you will see updated information on what you’ve spent and the revenue you’ve brought it. And you will spend mere moments a day on this accounting task.

Why do this daily? You are much more likely to remember why you made a transaction yesterday than you are if you wait a week. Trying to remember why you went to the office supply store on Monday when it’s now Friday only serves to make this task take longer, so work your bank, credit card, and sales feeds daily.

12. Deposit cash and checks

Another daily accounting task is to deposit any cash or checks that you receive. For cash deposits, you ideally should have a conveniently located bank or ATM. Most of the top banks for small businesses accept mobile check deposits, so depositing checks should only take a few moments out of your day. Doing this on a daily basis ensures that you don’t lose track of incoming revenue.

Conclusion

Finances are a challenge for many businesses owners. Failure to comply with accounting policies can lead to errors and fraud, which will be bad for businesses. With this checklist, you can identify how to accomplish the daily, weekly, and monthly to maintain your company’s finances. Pay attention to these tasks to ensure that your bookkeeping is accurate and avoid discrepancies.

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