Don’t Get Behind On Your Bookkeeping Checklist
As we come up on the end of the year, it’s time to review your bookkeeping and make sure everything is in order. You don’t want to fall behind and end up with extra work at the start of the year. Once you get behind, it’s hard to catch up. So, to keep you on task, here’s a bookkeeping checklist of things to do when you meet with your bookkeeper this quarter.
Your Business Bookkeeping Checklist
1. Update Your Bookkeeping Software
Your bookkeeping software is the most important tool you have for managing your finances. Keeping it up to date is necessary to get the best use from it. Not only that, updates include security enhancements to protect your company from any vulnerabilities discovered. Make sure you update your software before you do anything else.
2. Get Your Taxes Done Before Extension Deadline Ends
You generally want to avoid the extension trap when it comes to taxes, but sometimes things happen. Life is unpredictable, and sudden changes in your business can change the way you need to file. That deadline on the extension is coming up, though. Mid October, usually around the 15th, is the latest that the government will let you file your taxes, so make sure you get that cleared up if you haven’t already.
3. Review Your Cash Position
This is something you should do every month, but it’s amazing how the most obvious things get forgotten. You need to know how much cash your business has on hand to use so you can plan for future projects. Get this information organized and run it by those who need to know so everyone is on the same page. This can help you plan short term as well as long term growth for your business without having to wonder why you’re not reaching your goals.
4. Review Customer And Vendor Invoices
Keeping track of the cash flow is important. As you bring in money from customers and pay vendors for the materials or products you use, you should be keeping track of them. Your quarterly meetings with the bookkeeper should include a full review of these records so you know where you stand.
5. Review Old Accounts Payable and Receivable
While the most recent invoices are important to examine and record, don’t let older ones slip past. Review older accounts payable and accounts receivable to make sure everything is caught up. Double check on all payments you’ve made to make sure that there were no failed transactions or errors you missed. This will help you avoid being caught off guard by surprise bills or fines.
6. Calculate Sales Tax
If you live in a state that collect sales tax, then it’s on you to calculate, record, and pay it. Reviewing your sales tax records on a quarterly basis is a good way to make sure you never overspend, leaving you struggling to pull together enough money to pay it off. When you meet with your bookkeeper, calculate the tax so you can put aside the money to pay it and factor that into your budget going forward.
7. Review Open Vendor Deposit Reports
While you may have sent money to all of your vendors, they may not have sent the invoice to use that money yet. The open vendor deposit reports keep track of this and should be reviewed at every meeting. Failing to do so may leave you with discrepancies that can lead to double spending. Check these reports and then contact any vendors that have yet to send their invoices to find out what the delay is.
8. Review Cash Flow Forecast
Success in business means having goals. Those goals need to be based on reasonable expectations of income. Now that you’ve got the other accounting issues sorted out, review your forecasted cash flow so you can start setting up those goals for next year and start preparing your budget.
9. Review Your Inventory
With everything else done, you should finish by checking your inventory to make sure of what you have. You should be doing this one on a month-to-month basis to avoid shortages in supplies. During peak sales periods, you may even want to do this weekly just to ensure everything goes smoothly. If you have shortages on inventory, place some orders to fill those up so everything keeps running smoothly.
Check In Regularly
Check In RegularlyEach of the items on this bookkeeping checklist should be done quarterly, but there’s no reason you can’t do them more often. Weekly reviews might be excessive for many of these, but monthly reviews can help you react better to changes in the market that affect your business. Exactly how often you meet is dependent on what works best for your business, but if you aren’t meeting at least quarterly, you’re putting your business at risk of falling behind, or making errors.
Fall Matters
While you should be doing these tasks regularly, now it’s especially important to do a thorough review. You’re going into the last quarter of the year and organizing everything now is a good way to get ahead on the year’s taxes. The last thing you need is to get close to that April deadline and have a ton of accounting to do. Fall is the best time to get things calculated, since most of the year has already passed, so you can make the best guess as to how the taxes are going to look. Then, you should only need minimal adjustments for anything that surprises you during the last business quarter.
Get Help
For small businesses, this bookkeeping checklist can be hard to manage. There’s so much to do. That’s where we can help. Dragon Financial’s virtual assistants can help manage your business finances. We’ll save you time and money on your finances so you can save your sanity when tax month rolls around. Get in touch today to see what we can do for you!