Getting to grips with accounting for your small business can be a challenge, with a range of small yet vital tasks to be completed regularly in order to have peace of mind that your bookkeeping is shipshape.
One of the main challenges is understanding how often each of these tasks needs to be done. Overestimate and you could end up with an unmanageable daily workload. Underestimate and you could leave yourself in the dark as to your business’s financial performance - making best-practice decision-making nigh-on impossible.
In this bite-sized guide, we’re taking stock of some regular small business accounting duties and how often they should be performed to keep your company’s finances in peak health.
Daily accounting tasks
There are a handful of key business accounting tasks that are best done daily so you can keep one eye on the most important financial metrics and ensure your reporting is always in pristine condition. These include:
- Financial data updates: keeping an up-to-date record of your business’s incomings and outgoings each day will put your business in the best possible position when it comes to reactive decision-making, as well as internal and external audits
- Cash reconciliation: reconciling cash and receipts in conjunction with your business’s books is crucial as it helps you to identify any errors and ensure parity between the two come end-of-year reporting time
- Recording expenses: recording your various business expenses and categorising them for bookkeeping and tax purposes keeps your financial reporting accurate and up to date. This eliminates the need for any retroactive categorisation, which can be a headache, to say the least
Weekly accounting tasks
To keep a watchful eye on your business’s incomings and outgoings and maintain confidence in the accuracy of your financial reporting, carve out some time once a week to take care of:
- Bank reconciliation: as a sort of QA process on your daily cash reconciliation, performing weekly bank reconciliation to ensure your figures match and no errors are present will give you further confidence in your business’s books
- Payments and invoicing: protecting cash flow is priority number one in any business, which makes proactive payments and invoicing crucial. Getting your invoices out in a timely fashion ensures you’re paid on time, while being equally prompt with payments to your vendors affords you a clear view of your company’s cash flow
- Timesheet reviews: if your business’s accounting function is responsible for overseeing team time spends, the job of combing through employee timesheets is one best done weekly. This gives you welcome insight on how efficiently your team is working, while informing payment decisions for any non-salaried employees paid based on the hours they work
Monthly accounting tasks
The following are some of your less frequent accounting tasks you may choose to undertake on a monthly basis, assuming they’re applicable to your business:
- Budget reviews: effective budgeting leads to a welcome return on investment and potentially efficiency savings in a best-case scenario. By comparing budgets with expenses and profit, you can learn how accurate your budgeting is and improve your financial forecasting in the future
- Bill payments: any regular bills that need to be paid on a monthly basis, as opposed to vendor payments which may be more or less often depending on your agreements, fall under this category. Examples include utility bills for your business premises, with payments being made and recorded as part of the same task for efficiency and accuracy
- Data backups: ensuring the safe storage of your business’s financial data is vital - so make sure to generate data backups monthly, if not more often. Of course, if you use cloud accounting software like Xero, you’ll be able to run automated backups on a schedule of your choosing - taking this otherwise manual job off your accounting to-do list
Do all of these regular accounting duties sound like a headache waiting to happen? If you’d rather outsource your business’s bookkeeping to the experts, contact Harlands Accountants now. We love lightening the load for small businesses, helping them to focus their time and attention on what they do best: running their company.