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- Basic Accounting Tasks for Small Business Owners & Freelancers.
Have you ever found yourself sitting at your desk after a lovely weekend rest or holiday, facing a huge pile of receipts, transaction documents and bank statements that need to be sorted out?
Business ownership is a full-time job, even without adding accounting tasks into the mix. Hiring a bookkeeper to do some of these tasks for you or using DIY accounting software is a great step, but even those don’t relieve you of all the responsibility surrounding your business’ accounting.
Here is a list of basic accounting tasks you should be doing every week.
1. Check Cash-flow Position Weekly.
Obsessing every day over cash flow won’t get you far. Instead, review your cash flow weekly. This will allow for transactions to process. Why bother with reviewing cash flow? Reviewing the position of your cash flow gives you a real-time look at how funds are coming in and going out of your business.
2. Send out Invoice as Soon as You Can.
Waiting to send an invoice until long after it’s appropriate to send the invoice is only going to have a negative effect on your cash flow. Not only are you extending the time it takes to get paid, but you’re also running the risk of actually forgetting to send the invoice and not getting paid at all. It’s your job to send invoices on time hence, get in the habit of firing off the invoice as soon as it’s OK to do so.
3. Record all ExpenseS & Transactions.
Recording all your expenses and transactions will help ensure that your books are in checks and in contact. For most small businesses bookkeeping is not just stressful but difficult to understand. Bookkeeping helps you record all daily business transactions and ensure that nothing is left out. Bookkeeping also gives you a snapshot of your business financials in time.
4. Balance Your Business Checkbook.
Just as you reconcile your personal checking account, you need to be sure your cash business transaction entries are accurate each month and that you are working with the correct cash position. Reconciling your cash makes it easier to discover and correct any errors or omissions either by you or by the bank in time to correct them. Ideally, you should be receiving payment on invoices digitally (i.e., bank-to-bank transfer) but if you do still take checks, deposit them as soon as you get them.
5. Prepare & File your Taxes on-time.
When you become a small business owner, you acquire a responsibility for making tax payments that you didn’t have as an employee. For most small businesses, tax-related activities are not just limited to the annual filing deadlines but knowing how much tax you have to make based on your revenue all through the year. Most people require the service of a professional accountant to get their tax sorted out sometimes and I will suggest you call for help if you ever need one.
These are some of the most universal, straightforward tasks that, when implemented routinely, can help every small business owner confidently build a great business. Is there an accounting habit you practice that’s worth sharing? Tell us in the comments.