Bookkeeping plays a crucial role in the smooth financial management of firms and organizations. It helps businesses owners to understand the financial standing of their business and plan accordingly. It also helps in analyzing the cashflow in the company and how the finances are structured in the company. To ensure that you are doing your bookkeeping right, it is better to maintain a bookkeeping checklist, which will help in keeping a track on all the tasks. But how to decide the items on the checklist? What all should be listed? This blog will answer all your questions and provide you a quick bookkeeping checklist to start off on the right foot.
- Revisit the Cash Position
- Updating your Accounting Program
- Record Sales and Expenditures
- Review Customer and Vendor Invoices
- Reconcile Your Records
- Sales Tax Returns
- Review Your Inventory
- Record Credit Cards Transactions
- Review Debt Accounts
- Review WIP Reports
Revisit the Cash Position
Effective bookkeeping requires constant attention to cash flow. A cash flow statement demonstrates how money enters and leaves your company over time and offers important insights about your company’s liquidity and capacity to pay debts. You can make sure you have enough cash on hand to cover bills and other required expenses by checking your cash position at the end of every month. Also, this will assist you in seeing any possible issues with cash flow early so that you may take proactive measures to resolve them. Overall, keeping accurate and current cash flow records is crucial for any business’s long-term performance.
Updating your Accounting Program
Your ability to handle your company’s finances successfully and efficiently depends greatly on the bookkeeping software you choose. It’s crucial to regularly review and update your bookkeeping software to make sure it is functioning properly and giving you accurate data. Always check that the software you are utilising is up to date and compatible with your current bookkeeping requirements. If the software you’re using isn’t fulfilling your needs, it could be time to upgrade or find an other solution. You may avoid mistakes, save time, and guarantee that your financial records are always correct and current by maintaining your bookkeeping software.
Record Sales and Expenditures
By keeping track of your expenditures, you might spot areas where you might be overspending and strategies to reduce costs. You can raise your profitability and your bottom line by doing this. Comparably, by monitoring your revenue, you may spot trends and areas for expansion as well as create plans to boost both sales and revenue. Overall, consistent revenue and spending recording is necessary for efficient bookkeeping and money management. You can use it to manage the finances of your company, come to wise judgements, and finally reach your financial objectives.
Review Customer and Vendor Invoices
Invoice management is a crucial aspect of business financial management. An important record that acts as evidence of a transaction between a business and its clients or suppliers is the invoice. Invoices are significant legally, but they also offer organisations useful financial data. Business owners can monitor their cash flow and expenses by keeping track of their invoices. When choosing when to buy something, haggle with a vendor, or give discounts to customers, businesses can use this information to assist them make smart financial decisions. Businesses can also make sure that they are receiving payments on time and that they are paying their vendors on time by tracking invoices.
Reconcile Your Records
Businesses can find and fix any inaccuracies or anomalies in their financial records by comparing the bank statement with the company’s accounting records. This lessens the chance of fraud or other financial mismanagement and helps to assure the correctness of the financial accounts. For businesses, bank reconciliation statements are a crucial instrument for ensuring the correctness of their financial records and lowering the risk of fraud or financial abuse. Businesses may keep track of their financial activity and spot any problems or concerns early on by reconciling the bank statement on a monthly basis. This maintains accurate books and encourages efficiency in the recording of transactions.
Sales Tax Returns
Businesses can get a number of advantages from monthly sales tax preparation and recording. It can first aid in ensuring that sales tax is correctly reported and gathered. Businesses can uncover any anomalies or errors in their sales tax estimates and make the necessary corrections in a timely way by keeping accurate records. This can lessen the possibility of receiving penalties or fines for failing to comply with tax laws. Businesses can better manage their cash flow by monthly sales tax preparation. Businesses can lower their risk of being required to pay a sizable lump sum at the end of the quarter or year by saving away the right amount of sales tax each month. This can enhance financial planning and lower risk of cashflow problems.
Review Your Inventory
Because they help organizations identify and address potential issues like supply shortages or overstocking, frequent inventory inspections are essential. While overstocking can divert valuable resources and increase storage costs, supply shortages can cause missed sales and damaged customer relationships. By performing routine inventory inspections, businesses can identify trends in customer demand and alter their inventory levels. In conclusion, it’s critical for business managers to regularly assess their organization’s inventory to ensure they have the right amount of stock on hand to satisfy customer demand while minimizing inventory costs.
Record Credit Cards Transactions
Separating personal and company transactions makes it simpler to maintain accurate records of business activity and avoid confusion or errors in financial reporting. Separating business and personal transactions makes it easier to keep track of and reconcile costs, file taxes, and assess financial performance. Mixing personal and business expenses can result in fines and interest charges in addition to making it more challenging to deduct business expenses on tax returns. To record credit card transactions separately, businesses might register a second credit card account that is only used for business expenses. This will allow you to separate any business-related credit card purchases from personal ones and track and reconcile them separately.
Review Debt Accounts
Accounts payable and receivable reports need to be periodically examined in order to effectively manage a company’s finances. It helps business owners keep informed about their current financial status, which helps them manage their cash flow successfully. By examining accounts payable reports, business owners may make sure they are aware of any overdue payments or other commitments. This helps customers prioritise their spending and avoid late payment fines. Also, by analysing accounts receivable data, business owners may keep track of any overdue invoices from clients. This makes it simpler for them to investigate past-due payments and take the required actions to get the money owed back.
Review WIP Reports
Work-in-progress, or “WIP,” refers to assignments or initiatives that have not yet been finished. WIP can refer to ongoing but unfinished projects, services that are still being rendered, or items that are only partially completed. Companies must routinely assess their WIP to ensure they are on track to meet their goals and objectives. By routinely assessing WIP to identify any bottlenecks or issues that might be preventing the completion of works and projects, business owners can take remedial action to ensure that tasks are completed on schedule. To stay on course and make sure they are moving in the right direction towards their objectives, it is a good idea for businesses to regularly check their WIP.
With this, monthly bookkeeping checklist comes to an end. We hope you found this useful and that it will help you manage your finances better. Happy bookkeeping!