Basic Accounting Tasks for a Small Business
Basic Accounting Tasks for a Small Business. Bookkeeping tasks provide the records and analysis necessary to understand a business’s finances.
But, first of all, do you know the difference between bookkeeping and accounting??
Bookkeeping involves keeping track of your financial records. It is the process of recording business transactions, such as invoices, bank statements, and receipts, and entering that information into a database.
Accounting involves reporting, interpreting, and analysing the finances of your business.
Looks complicated, right?
But it’s not!
The key is creating a realistic plan with a budget, recording your transactions correctly, reviewing your results regularly, and keeping good records.
Read on for a breakdown of essential bookkeeping tasks to keep your small business finances in order.
Business owners have plenty on their to-do lists, daily. Yet, certain responsibilities, like bookkeeping, cannot be put aside.
Bookkeeping tasks need to be done on a weekly, if not daily, basis.
At least once a week, the bookkeeper needs to make sure all the numbers add up and that there is enough cash to cover expenses, and check the profits.
For good management, you need to start from the basics. Below we have listed some points for you to observe.
Create a weekly routine
Having a weekly routine is ideal for facilitating the storage and control of information, without leaving everything until the end of the month. Take a moment each week to do a financial review and make sure all information is being recorded.
You can create checklists of how this routine will work. This can save time and ensures you don’t miss anything.
Record all store expenses and income
To do the bookkeeping for your store, you need to know the expenses and income of the business, how much you receive and how much is spent. so, it is necessary to record all proof of purchases and sales, such as invoices and bank statements.
Create a routine for collecting and storing information so that nothing is forgotten. If you work with a team, explain to your employees the importance of this information and provide instructions on how they can collaborate with this area.
Your business needs to keep clear records of income, expenses, employees, tax documents, and accounts. Some of the basic records you need on your weekly task list include:
- Business expenses
- Sales records
- Accounts receivable
- Accounts payable
- Employee information
- Purchase orders
- Banks statements
Record and categorise expenses
Categorising your costs will help keep your company organized; some examples of these categories can be:
- Employee Benefits
- Office Expenses
- Office Supplies
- Rent, Utilities & Phone
- Loan & Interest Payments
Never mix personal finances with those of the organisation
This is a widespread mistake, especially in a small businesses. The store owner is often responsible for the finances, sales, and marketing, providing a typical ambient for a mix of personal and company expenses.
Review employee timesheets
Keep track of payroll expenses to make changes to your labour mix if needed, stay within your budget, keep on track with the expenses for this area and also have all the information that you need in case of an audit or employee issue.
Inventory is the data record for each item in your store. If you sell products at your business, you likely have some inventory. Knowing how much you have in your stock is a crucial part of running your business. It is important to know what you have in stock, what has been sold and what’s been reordered.
Each entry must have a description the along with relevant data. These records are either can be created manually or digitally.
Review your business cash flow
Forecasting how much cash you need in the coming weeks/months will help you reserve enough money to pay bills, including your employees and suppliers. Plus, you can make more informed decisions about your business investments.
Balancing the books
Balancing your books once a month will make your work easier. When you maintain an accurate accounting system, you can quickly understand your company’s financial health.
Ensure all revenue and expense transactions have been recorded
Revenue and expenses, including payroll and other financial transactions, should be verified for accuracy and completeness. Double-check all the transactions that occurred during the month.
Track budgets, discrepancies, and actual reports
Tracking your expenses is one of the critical factors in making your budget work for you. Check if your budget vs your actual statement looks as comparable as you expected.
Review accounts receivable and outstanding invoices
Review accounts receivable to resolve outstanding invoices. Identify which customers haven’t paid by the due date and send out reminders and statements to those customers that have fallen behind.
Back up your data and scan your documents and receipts
If you’re not using cloud-based software that automatically backs up your data, make sure to back up manually at least once a day.
Scanning your documents and receipts into a cloud storage system will protect your essential records from degradation due to weather and time. In the event of an audit, you can quickly provide any requested documentation without concern the document will not be readable.
Analyse inventory status
If you carry stock, check your products that sell fast and identify others that are moving slowly and may have to be marked down. By checking regularly, it’s easier to compare with previous months and adjust, so you are neither short nor overloaded.
Review employee timesheets
Review the payroll summary before payments are made to avoid having to make corrections during the coming payroll period.
Most of the tasks listed above can be easily performed by appropriate software. Technology can automate and streamline many of your manual, time consuming, month-end tasks.
Integration of Accounting Software with your EPOS System
Many bookkeeping processes listed here are time-consuming and error-prone if executed manually, but can be automated with accounting software.
You can now integrate leading accounting software with your point of sale. Once you have your EPOS system installed and integrated with your accounting software, you will have more accuracy in your accounts and more time to focus on growing your business.
Retail Solutions integrates with the best accounting tools on the market, like Sage, Exchequer, Xero Accounting, and AccountsIQ.
While each has unique aspects, all will make reconciling your accounts quicker and easier than ever.
Using our point-of-sale systems, you can access an extensive app store full of helpful tools.
Who are we?
We are dedicated to providing your store with the most up-to-date and reliable point-of-sale hardware, along with software management tools to help you manage your business effectively.
About the author:
Juliane Camozzato is the Head of Marketing at Retail Solutions. You can follow her on LinkedIn!