Small Business Bookkeeping: 5 Essential Tasks to do Each Month

When starting a business, there are many aspects one needs to look into. And while business owners bury themselves in numerous projects and other core tasks, it is the finances that usually take a back seat. And before you know it, it becomes a complicated affair with entrepreneurs losing out on their hard earned income merely due to carelessness. In order to avoid such a situation, it is essential to keep the business finances in order right from the start. By staying organized and being on top of all the transactions on a monthly basis, you can ensure that your business functions smoothly. To make things simpler, here’s a quick look at the essential tasks that you ought to perform each month. This checklist is bound to make you handle your finances with ease…

Use bookkeeping software and hire an accountant
The most effective method to maintaining a clean financial record is to hire a bookkeeper or an accountant. Additionally, using simple bookkeeping softwares come in handy as they keep a track of all client data, incomes and payments, and invoices, thus making your task a whole lot easier. There are several programs you could choose from like FreshBooks or QuickBooks, which calculates reports and taxes on a monthly, quarterly, or yearly basis. A simple spreadsheet can also help simplify the task of tracking the income and expenses on a monthly basis.

Record and verify bills and receipts
Saving all incoming and outgoing bills and receipts will not only help you maintain a clean record, but will also assist in saving ample money during the quarterly or annual tax filing. There are multiple ways one can verify business receipts on a regular basis. But in order to do so, it is essential to first segregate all business and personal transactions. Softwares like QuickBook help you keep a track of receipts so you can review them weekly or monthly. However, if this task seems too tedious, you can always hire a bookkeeper locally, or outsource bookkeeping services to India, China, Philippines, and other similar countries in order to reduce the expenses of hiring an accountant full-time.

Send necessary invoices
Reviewing accounts each month will also give you a better clarity on outstanding payments. Tracking the missing payments and sending out receivable invoices will give you better control on extended credit over lack of sales. And as they say, “Never let a customer owe you more than you can afford to lose”. And the sooner you prepare and send out the invoices, the sooner you get paid.

Process and update payroll
If you’re starting anew, payroll shouldn’t be a hard task. However, SMEs need to be extra careful when processing payrolls, especially when it comes to tax related payments. If you hire a bookkeeper or seek help from payroll services, they manage the entire process of payroll—an investment that is totally worth it in order to avoid undue headaches during tax filing.

Review cash flow for the upcoming month
By the end of the month, it is essential to assess all that your business has achieved and lost. This will give you a better idea and help you set appropriate goals for the coming month, while at the same time, giving you the chance to make up for any loss incurred in the current month before the year’s end.

To sum up, all business owners can set themselves up on the route to success by merely making it a habit to set aside time to review finances on a monthly basis. And even if you do hire a bookkeeper to perform the task, ensure you check in with your accountant by month’s end and review each entry. By making this checklist a priority, you will have all things under your control and right on track!