As a business owner, you wear a lot of “hats” in order to keep things going. One of those hats is keeping up with your bookkeeping records. If this particular hat causes you frustration, let me help to simplify it for you.

If you have a plan going forward, it will help you to get things done. For me, having my “to-do” list helps me to zero-in on what really needs to be accomplished without wasting important brain energy.

There are some bookkeeping activities that should be attended to very often, while others can be much less frequent. So I have them broken down for you by Daily, Weekly, Monthly, Quarterly, and Yearly activities.

DAILY

  • Check Bank Balances

It’s important to always have a handle on what’s in your wallet. Especially starting out in your business, there can be a lot of expenses and not much revenue coming in yet. Knowing where you are with money can help you to make wise and informed decisions, or help to avoid a catastrophe with your account. It’s a simple thing to implement into your daily activities.

  • Check Incoming & Outgoing Money

This goes right along with checking your bank balances. Sometimes, though, your balances don’t show all the activity. When you have pending deposits or outstanding checks, they might not yet be reflected in your account. So while you are checking your balances, take note of anything lingering out there that will soon be hitting the accounts and changing their balances.

WEEKLY

  • Send Invoices

We can become so busy DOING business, that we don’t find the time to sit down and make out an invoice in order to get PAID for the business we did. I don’t need to tell you how important finding that time is.

We are in business to make money. Even if we have other reasons for what we do, we have to be able to pay for our expenses and “keep the lights on.” Set aside time weekly, or more often if you need, to make out your invoices and get them sent off.

  • Apply Customer Payments to Invoices

As money comes in, make sure you have a way to record it. If weeks go by before this happens, you might forget about it or forget who gave it to you. It could be as simple for you as writing the customer’s name in your check register next to the deposit. But also make sure you apply it to your invoice if you are using software. This way, you can check back later to see who has paid and who hasn’t.

If you don’t have this information up to date when a customer asks you, you might not have correct information to give them. Not having information, or worse, giving them the wrong information could make them lose confidence in you. You won’t want to learn that the hard way.

  • Record Bills Received

Keeping track of bills and when they need to be paid can be the most frustrating. It’s not necessarily what’s on your mind every day. But if you miss a payment, it could really cost you. Keep them in a visual place, if you can. Also, put them on your calendar for when they need to be paid by.

Having this activity on your weekly checklist will give you a backup to your other methods. Also, making sure you get the bills entered into your bookkeeping software will give you accurate information there, knowing what is due and what is paid.

  • Pay Due Bills

Preferably at the beginning of each week, it’s a good idea to see which bills are coming up. Take some time to scan the list and see what’s due. It won’t take long, and can save you from making a mistake from not paying an important item. Make sure and mark the bill paid on paper, in the computer, or both!

  • Organize Receipts & Other Documents

Do you struggle with paper piles? I do! Even though I consider myself an organized person, the piles can get out of hand fast. When it comes to important papers and receipts, I keep them in file bins. This way, they won’t get lost in the piles. Each bin is labeled, so the right things go to the right place.

Each week, make sure you go through the bins. Receipts should be recorded in your bookkeeping system. Other papers might just need to be filed. This will help you to stay organized and able to find things when you need them.

  • Categorize Transactions in Bookkeeping Software

This is an activity that a lot of business owners never get to. Then you get to the end of the year and have to try to recreate everything you did for 365 days. A much better plan is to keep up with it every week. If you are using the computer to record your bookkeeping, categorize, or label each transaction (money and money out).

  • Transfer Money to Tax Savings Account

If you are making quarterly estimated income tax payments, it helps you to have a savings account just for that purpose. Consider how much a week or a month you might need to save. Or maybe use a percentage of every item or service you sell.

Take a few minutes each week and transfer this amount to your savings so it will be there waiting for you at the end of the quarter. If you do this less often than a week, it’s a much larger payment and more painful to see removed from your checking account.

MONTHLY

  • Follow-up on Unpaid Invoices

Since you are weekly sending out your invoices and applying the payments you receive, you will be able to see at a glance which invoices have been paid and which haven’t. If your bookkeeping is set up on the computer, it will be calculating which of those unpaid invoices are the oldest and how many days they have gone unpaid.

Staying on top of this is critical, because if you let too much time go by before you handle this, it can become impossible to collect. Each month, resend a copy of the invoice, a statement, or an email with the information. Whatever means you use, make a contact with the customer regarding their unpaid invoice, letting them know that payment is due.

  • Pay Yourself

Do I have to remind you? You’re welcome! The easiest thing to do, is determine how much a month you will be receiving. Then set an automatic transfer each month from your business account to your personal. If you’re not quite there yet, just make this your reminder to take your cut each month.

  • Reconcile Bank Accounts

This really does need to be done monthly. By doing this, you can catch errors in your account or in your bookkeeping, or possibly find fraud that could be happening there.

It’s not as difficult as it seems, even if you’re having to do it by hand. Here’s a rundown:  Take your monthly bank statement. Match all your known deposits, checks and other withdrawls. Investigate anything that might be on the statement, that you weren’t expecting.

Here’s the math: Start with last month’s ending bank balance. Add all the deposits you have recorded. Subtract all your checks, debit card payments, etc. Add back in any check or withdrawl that wasn’t cleared in the account before the statement was made. Subtract any deposit that didn’t get recorded before the statement. The sum of these should be the new ending balance on your bank’s statement. If it is not, you have some investigating to do.

  • Print & Review Reports

This is especially easy if you have bookkeeping software. After getting your bookkeeping up to date for the month, print out reports for the month. I suggest printing a Balance Sheet and a Profit & Loss Statement. These will give you a snapshot of your business’ health, and of how it performed the previous month.

The information you receive from monthly reports like these will help you when you are making decisions about your business. You can use this information to make goals for the next month, or to make alterations to how you are conducting your business. It’s priceless!

QUARTERLY

  • Make Estimated Income Tax Payment

Now is the time that you send off the money you have been saving for estimated quarterly income tax payments.  These payment deadlines are April 15, June 17, September 16, and January 15.

Please notice that the 2nd quarter payment on June 17 is for only 2 months’ worth and the 4th quarter payment is for 4 months. Keep track of these payments and make them before the deadlines in order to avoid any penalties.

  • Compare Prior Quarter’s Goals to Actuals

Hopefully you have been setting goals for yourself in your business. If not, now is a great time to start. If you do have a goal from last quarter, take a few minutes to compare how you did. Compare what actually happened in your business, to the goals you set and hoped to achieve. Use this information to start thinking about what goals you will want to make for your next quarter.

  • Set Next Quarter’s goals

So you’ve compared your actuals to your goals. Now it’s time to write down next quarter’s goals. Keep them in a visible place, so you can make decisions based on what you hope to accomplish.

  • Begin Collection Process on Unpaid Invoices

When you look over your unpaid invoices, you might find some there that have gone too long without being paid. Now is the time to take a more serious approach to collect on them. Phone calls will likely need to be made, and possibly even using a collection agency.

YEARLY

  • Print & Review Annual Reports

These are the same reports you have been printing out every month, except with the date range for the year. Use the last day of the year for your Balance Sheet, and January 1 through December 31 for your Profit and Loss.

This will give you your snapshot at the end of the year and your profit details for the entire year. These reports will be very helpful when you are having your taxes prepared and also helpful to you as you make plans for the new year.

  • Follow Checklist for Preparing For Taxes

If your accountant doesn’t have their own checklist for you to follow, use the simple checklist I have available to you, found at the bottom of this post. There are a lot of items and information that need to be gathered and a checklist will help guide you through that process.

  • Compare Annual Goals to Actual

Like you did for your quarterly goals, compare your yearly actual activity to the goals you set for your year. Consider what changes or challenges you need for the year ahead of you.

  • Set New Year’s Goals

You’ve compared your goals for the past year to how your business performed. What changes need to be made? Are there any challenges you came up with that you would like to tackle. Write out your goals for the coming year and keep them visible to see throughout the year.

  • Reassess Your Salary, Tax Savings & Expenses

While you are in the mode of reflection and projection, take some time to consider if you need to make any adjustments to your salary, tax savings and expenses. Your reports and goal comparisons will come in handy as you make these decisions for the coming year.

Wrap-up

You made it to the end of this long list of items, but as you can see, there is a lot to stay on top of with your bookkeeping. Pacing yourself throughout the weeks, months and year will help you to be successful. As a reference tool, I have included below a checklist of all the items covered in this post. I hope you will find it helpful to you.

If you find that your business is growing and you have less time to keep up on all of these things throughout the year, consider getting some help with your bookkeeping. It could be just the right time for you, freeing up more time for doing more in your area of expertise.

I have included a button below for you to click if you would like to get more information with a FREE consultation. I would love to discuss your options with you.

 

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