You need to know that you have enough in your accounts to cover any checks that you plan to write. Use your accounting software platform to verify your balances and get a handle on your cash position each day. While you’re at it, you’ll be able to identify trouble spots and make adjustments to improve your business. Business accounting is the process of gathering and analyzing financial information on business activity, 5 stages of business life cycle and how to prepare for each recording transactions, and producing financial statements. At tax time, carefully review your company’s full-year financial reports before giving them to your accountant.

Besides reviewing the proper class tracking of transactions, reviewing the current and previous month’s profit and loss balances is imperative. The profit and loss account summarizes the company’s income and expense transactions for the period. Its bottom line, the net income, indicates the company’s profits after all expenses, including loan interests and tax payments.

Review Employee Timesheets

Simply consult the checklist on a regular basis, and you’ll be a small business accounting guru before you know it. You can use an accounts receivable aging report for a quick view of outstanding customer payments. The beginning of the month is a good time to send overdue reminder statements to customers, clients, and anyone else who owes you money. If you have employees, you likely need to run payroll weekly, but your pay period may also fall into a different category, such as bi-weekly or semi-monthly. You’ll want to process payroll on your set dates and research your payroll tax requirements, which can differ for each business. Be sure to include an “aging” column to separate “open invoices” by the number of days a bill is past due.

1. Most invoices are due within 30 days, noted as “Net 30” at the bottom of your invoice.
2. This task keeps you from making the mistake of contacting customers who have already paid you for the same invoice.
3. Without a due date, you will have more trouble forecasting monthly revenue.
4. Also, there is nothing wrong with adjusting those goals to meet the current business climate.
5. However, the following list outlines the general items your checklist should include.
6. Jetpack Workflow is the ideal solution for businesses seeking to automate repetitive tasks and work more efficiently.

Doing this ensures you capture the correct expense details, including the amounts and dates. Then the balances in the profit and loss statement will accurately reflect the cash outflows for those operating expenses. As such, reconciling the assets account allows you to confirm the balance and post the necessary transactions. A period-end process refers to the end of every accounting period, monthly or annual, when a business generates financial reports to help analyze its financial health.

Similarly, confirm whether any invoices you’ve sent on behalf of your clients were left unpaid each week. Follow up if needed to collect payment and be sure you sent the invoices to the appropriate bookkeeping journals customers. Building these weekly accounting tasks into your routine keeps you proactive with your client work as well as efficient and organized. At the end of each day, reconcile all cash payments and payment receipts received in the general ledger to get a good idea of each client’s cash balance.

How our Monthly General Accounting Checklist Template will help your firm

You can also customize it to fit your firm’s needs and share it with your team members. A monthly general accounting checklist template will help you create a standardized, efficient, and quick workflow process to complete monthly accounting for your clients. The accounts receivable (AR) ledger is the opposite of accounts payable. In short, it reflects the cash for products or services you sold or delivered and have yet to receive payment from your customers. The period’s balance in the AR ledger appears in your balance sheet as an asset. Your profit and loss statement (otherwise known as an income statement) shows revenue, expenses, and profits or losses during a given period of time (month, quarter, etc.).

#4: Review Aged Accounts Receivable and Accounts Payable Reports

Businesses that operate with inventory need to stay on top of ordering on a regular basis to ensure products are in stock. Take the time each week to review your inventory counts and place orders when levels are reaching a low point. To help aid the order process, review how long it took for each product to sell through, and choose the quantity of your order accordingly. This way, you won’t sit on inventory, tying up cash flow, for any longer than you need to. If your business needs to charge and collect sales tax for the products you sell, you’ll likely need to make monthly payments to the appropriate state department. Cash flow management is critical and includes forecasting how much cash you will need in the coming weeks and months.

However, the following list outlines the general items your checklist should include. Join thousands of entrepreneurs and business owners and receive small business tips straight to your inbox. Consult the infographic at the bottom of this post as a quick reference.

While you will want to calculate all of those figures exactly, you can use last year’s income figures as a guide. Payment dates don’t always coincide with the timing that you’ve established to pay your employees. Make sure to have a handle on the tax payment dates, and then withhold, report, and deposit payroll taxes by the necessary dates. You’ll be responsible for paying into Medicare, disability, income tax, and social security for each of your employees. Set time aside each week to apply payments from customers to about progress billing for jobs their open invoices. Ensuring that all customer payments are applied within the system will help paint a clear picture of your cash flow.

Save yourself hours of accounting admin so you can focus on growing your business. All 1099s must be filed with the IRS online or through the mail before January 31 to avoid penalties. You can complete these forms once you reconcile the client’s books at the end of the year and know how much they paid out to each entity.