Small Business Accounting Checklist & Infographic

  • Posted by Patricia
  • Posted in Bookkeeping
  • Posted : May 17th, 2021


Pay all necessary state taxes — which are different in every state but can include sales tax, excise taxes and more. Businesses will also be taxed at the local level and need to pay property taxes. Accurate inventory numbers on are required to determine cost of goods sold , an important figure when creating the income statement for companies in many industries.

What are the basic steps of bookkeeping?

The process of bookkeeping involves four basic steps: 1) analyzing financial transactions and assigning them to specific accounts; 2) writing original journal entries that credit and debit the appropriate accounts; 3) posting entries to ledger accounts; and 4) adjusting entries at the end of each accounting period.

The following checklist lays out a recommended timeline to take care of the accounting functions that will keep you attuned to the state of your business and streamline your tax preparation. Read through for in-depth coverage of your required tasks, or skip to the end to see a handy infographic to use as a visual checklist. In this post, we’ll look at why you need a checklist and provide a list of functions bookkeepers complete to close their clients’ books monthly and how to streamline each step. A checklist can be helpful if you want to pass the bookkeeping responsibility onto someone else.

Review Past-Due Receivables

Likewise, simple human error can cause significant headaches for end-of-year accounting. Even if a professional tries to automate the process, a misclick or a typo in their formula can result in equally inaccurate data. This is by no means an exhaustive list; the steps required can also vary depending on the nature of the business going through the year-end accounting process. Partner with CPACharge Join the best-in-accounting-payments team as a CPACharge partner and help lead innovation in the accounting industry through tech integrations and alliances.

  • These annual checks mainly cater toward regulatory and compliance requirements, along with reporting of performance to shareholders.
  • One of the easiest and most effective ways to upgrade your current technology stack is by implementing an online payment solution.
  • After reconciling your bank and credit statements, turn your attention to Age Accounts Reports.
  • Once you calculate and file your sales tax, begin focusing on any open deposit reports.
  • Be sure to add your new customer to your CRM system and start them on whichever email flow is appropriate, e.g., a welcome flow.

You could also send a final onboarding gift, like a branded mug or pen. With a good picture of what your client needs to know, build a training plan that will cover important apps and activities they need to learn. Start with what will need the most attention and build from there. Book a few training sessions so you have adequate time to cover everything and don’t need to cram everything in one session. At this point, get any missing information you need for tool access or walk them through the new client questionnaire if they haven’t already completed it. While doing that, establish the best communication channel with your client so conversations remain in one place.

Weekly Accounting Tasks

The professional may even ask for a lower amount than what is owed. While this may sound like a crazy idea, getting paid any amount for the invoice is better than collecting absolutely nothing from it. A full accounting of the company’s finances is required to accurately perform year-end closing activities for a company.

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This not only helps them but will save you extra work and time. Covering things like not mixing personal and business bank accounts, what is and isn’t a business expense, and how to record receipts and paperwork. The sum of money your company owes to suppliers or vendors is called accounts payable.

If you have deposits in transit or outstanding checks, let your account reflect it so it all balances. These statements are prepared based on the records maintained throughout the year, and their effectiveness depends on the accuracy of those accounts. If you are looking for an easier way to implement this template in your firm and share it with your team try our accounting workflow management solution, Financial Cents, for free. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.

Accounting & Bookkeeping checklist – Outbooks

With everyone informed and aware of what’s to come, there should be no surprises, and the client should feel reassured. Be sure to follow your client’s business on social media using your business profile to show your investment in their success. At the same time, add them to your practice’s newsletter if you haven’t already. You could also add their start date, birthday, or company anniversary to your calendar as a recurring event. These small touches generate goodwill and turn their experience with you into an excellent one.

What is the 4 step process of bookkeeping?

The first four steps in the accounting cycle are (1) identify and analyze transactions, (2) record transactions to a journal, (3) post journal information to a ledger, and (4) prepare an unadjusted trial balance.

Thoroughly investigate these records and see if any discrepancies are discovered. It may be necessary to adjust one of your records to make the balances equal. Of course, when data is missing, chasing it down can become a hassle.

Can a small business owner prepare company accounts by himself?

Start a suppliers file, sorted alphabetically, (Staples under “S”, Costco under “C,”etc.) for easy access. Create a payroll file sorted by payroll date and a bank statement file sorted by month. Many accounting software systems let you scan paper receipts and avoid physical files altogether. Caryl Ramseyhas years of experience assisting in different aspects of bookkeeping, taxes, and customer service.

tax requirements

To figure out your estimated tax, you should know your expected adjusted gross income, taxable income, taxes, deductions, and credits for the year. This will help you calculate your estimated business income tax for the quarter. Understanding your cash flow helps your business more effectively manage its budget. Monitoring and revising your cash flow budgets ensure your small business can use its retained earnings to grow sustainably. Leaving this to the end of the week or the end of the month makes it harder to keep track of what you owe, and risks late payments to your vendors. Recording your daily income and expenses in your accounts is a great way to handle this.

The Open Vendor Deposit Report needs to ensure that orders are properly filled by the vendor. Most importantly, by reviewing this, you need to accurately record your COGS and provide an accurate net income at the end of the year. Any outstanding balances or invoices the business owes should be noted and resolved to maintain a healthy cash flow going into the new year. Make sure you speak to the necessary parties at the company and have them make these payments as soon as possible. Small business generally accounts for only income statements, cash flow statements, and balance sheets. After this point in the setup process, it’s time to schedule another meeting.

This can be done with the use of spreadsheets or an accounting software. As soon as you send billing statements and invoices to customers, make a record of it where you can easily assess the status of customers’ payment positions. Doing so helps prevent duplicate and forgotten invoices. If you notice a past due, send the client a friendly reminder to submit payment. Small business owners who recently opened their doors may feel inexperienced with the operational tasks involving bookkeeping.


Your job is to review to make sure they appear reasonable. This allows you to compare the budget or prior period financial statements to watch for any errors or unusual balances. Review the income statement accounts for anything that looks off based on the preceding period and significant account balances that look out of place. You will also want to include the accounts receivable and accounts payable summary reports for their review. As an employer, you’re required to submit quarterly payroll reports to the IRS and make quarterly payroll tax payments . Depending on how you compensate yourself, you may have to pay self-employment taxes on your income.

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Review your year-to-date P&L to see if you owe any estimated taxes for that quarter. If you have inventory, set aside time to reorder products that sell quickly and identify others that are moving slowly and may have to be marked down or, ultimately, written off. By checking regularly (and comparing to prior months’ numbers), it’s easier to make adjustments so you are neither short nor overloaded. Depending on your state, you may also be required to pay quarterly sales taxes. Every quarter, you’ll have to pay a variety of quarterly employment taxes, including federal unemployment , state unemployment , and any applicable local taxes.

Analyzing inventory data also helps you identify excess stock, determine products to promote or reduce in price and those that need to be written off. Here are some of the most common places to keep your bookkeeping checklist… Check your inventory status on a month-to-month basis to avoid being caught off guard by a shortage in supplies.

By what is bookkeepinging your accounts payable, you can ensure that all bills have been appropriately recorded and that any past-due invoices have been paid. Keep copies of all invoices sent, all cash receipts and all cash payments (cash, cheque, credit card statements, etc.). Now is the time to prepare any necessary journal entries such as accruals, deferrals, prepaid expenses, and depreciation. It is essential to create schedules for these items to ensure the amount of each entry is accurate, such as a listing for fixed assets. All additions and disposals will need to be identified and tracked in your record depreciation expense. Keep track of routine journal entries and calculations done in the previous month to speed up this process each month.

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Also, all the records of the payments are done in the bookkeeping correctly. Having a formalized process like this means that every new customer to your firm receives the same treatment. It’s also great for bookkeepers as they’ll receive a client who has been fully briefed, with documents and files saved and tool access already granted. After the meeting, send an onboarding wrap-up letter that mentions the onboarding process has been completed and the ongoing services have now begun, so there’s no room for confusion. If you’ll be doing payroll for this client, this is when you’ll need the relevant documentation. Request tax forms, timesheets, direct deposit forms, and whatever else is necessary.

What are the basic steps of bookkeeping?

The process of bookkeeping involves four basic steps: 1) analyzing financial transactions and assigning them to specific accounts; 2) writing original journal entries that credit and debit the appropriate accounts; 3) posting entries to ledger accounts; and 4) adjusting entries at the end of each accounting period.

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