A Bookkeeping Checklist For Small Minnesota Businesses
A successful Minnesota business needs the best bookkeeping practices. Check out these critical checklists for monthly bookkeeping, setup, & documents.
A successful Minnesota business needs the best bookkeeping practices. Check out these critical checklists for monthly bookkeeping, setup, & documents.
Most bookkeeping consultants will agree that to achieve success, every business should apply top quality bookkeeping practices. However, if a business is struggling to keep up with these, or manage their business on one hand, while documenting and upkeep their records with the other, this is what a good bookkeeper is for. When it comes to bookkeeping and accounting for business purposes, however, there is a lot more to consider.
With employees and customers counting on a business, the stakes are much higher. There are countless pieces of advice accounting and bookkeeping service providers can give to owners, such as keeping personal and business finances completely separate from one another. Using these ideas, a bookkeeping checklist is the most invaluable tool a bookkeeper and a company can both bring to their arsenal of doing business together.
The first thing a company does every day would be to check on business bank accounts to see how much cash they have on hand. Every business owner knows that unexpected expenses can happen daily. Being unprepared and unable to know what you have on hand is a terrible thing. This is where business owners often get into trouble. It takes just a few minutes, and is truly worth every penny invested into.
Check in with employees and partners in the morning, and have them remind the company of any expenses they might be aware of. It is always a good idea to keep a list for the day of both incoming and outgoing payments. This will give a company a good sense of what their cash position will be like tomorrow.
Open up separate bank accounts and credit cards for company business usage. Not only will this be immensely helpful come tax time, it will also prevent a company from accidentally forgetting that, as an example, the ream of paper they have purchased was actually for home use and not for the office supplies.
If a company uses financial/bookkeeping software, they will want to keep it as up-to-date as possible; that way, they will have a clear picture of business finances and can run accurate financial reports as necessary. At the end of each day, it is important to check that software to see if there are any client payments or expenses that need to be recorded or categorized as well as get them properly filed before the end of the day.
A company should always establish internal controls within their company's bookkeeping policies and procedures to reduce the risk of any fraud. This includes dual control for processes which involve making or receiving payments of any kind. For example, a company should make it a safe and good practice to have one employee write the check and another reconcile the bank account and a third sign to authorize the payment. This prevents any internal tampering or mishandling by mistake as well as a series of checks and balances through the money payment process.
Any company should plan to review and reconcile their accounts on a weekly basis.The sooner a bookkeeper spots any inconsistencies with a companies bank or credit card statements, the faster the issue can be resolved.If a company intends to work with any vendors, they will want to make sure they are also paying them on time.
Every week, it is vital to make sure to review those open invoices, check deadlines, and pay any vendors as necessary. The more frequently a company sends invoices, the more frequently they can get paid. So instead of waiting until the end of the month to invoice possible clients, send those invoices every week, as well. Also make sure to include payment terms both clearly and precisely so potential clients know when their payments are due.
Before giving those tax returns to an accountant, go over them personally as a company. Companies will definitely want a clear idea of where their business is headed first, and should keep a solid record of this on file before just sending these returns blindly off to their accountants. Depending on the state, a company may also be required to pay quarterly sales taxes.
Just as businesses record payments coming in, they'll have to record outgoing payments. Writing checks is more than likely every business owner's least favorite thing to do. It's difficult to watch that money be spent. But those companies still have to keep on top of their payments. Understand that if a company stays on top of their payments, their customers are more likely to do the same.
A company ideally wants to constantly have an idea of what their cash flow goals are. Reminding themselves weekly, and making the proper adjustments as necessary. It is suggested to have a weekly, monthly, and annual cash flow projection. This enables a company to have both an immediate and holistic view of cash flow goals.
Reviewing the company’s end of the month balance sheet can give a sense of the financial performance for the month, how a company has performed compared to prior months/prior years, and any areas where they can stand to improve. At the end of the month, review all accounts receivable, as well. If there are any outstanding or past due invoices, a company will want to follow up on payments at least once a month.
If a company should have any open invoices or outstanding debts, they will want to collect them before year-end. Once they have collected any outstanding payments, a company can close out on their books for the year. Once they have closed out their books, a company can then create a year-end financial report that gives a very accurate picture of that financial performance for the year. A company can then approve and pass this off to that company’s accountant for tax purposes.
In summary, if a company wants to know what direction to take their business in the new year, then let the numbers be a guide, not guesswork. For a company to be both sustainable and successful, it needs to have a very efficient accounting and bookkeeping system in place. According to the National Federation of Independent Businesses (NFIB), approximately 30% of small businesses don’t survive their first two years, and another 50% don’t survive their first five
Get the timely, accurate reports a company needs to make better business decisions with bookkeeping. Managing finances can be a challenge but now that a company can have this basic bookkeeping checklist, they can have a list of all the tasks they will need to complete in order to take care of business finances on a daily, weekly, monthly, quarterly, and annual basis. So be sure to protect the financial health of that business.
Admin Solutions Group will help a company set up, develop and plan for a new business or work with a company to improve their existing business, all of which starts with having a strong set of books. Choosing Admin Solutions as a bookkeeper and coupling that with our services will give companies a strong business model to push forward with.
Don’t let the work and stress keep piling up. We're here to help provide the administrative support you need to allow you to focus on the growth and success of your business.