Your business is up and running. All of your social media accounts are set up and your website has visitors every day. Your email list is growing and you’re starting to see the fruits of your labor. Sales and affiliate income are starting to roll in.
You know you need to do bookkeeping tasks, but what needs to be done? And when? It’s stressful, isn’t it? Don’t you wish there was a bookkeeping checklist?
Well, I’m going to remove the stress and explain what you need to do and how often you should be doing it.
Let’s get started!
- Check bank balance & be aware of incoming/outgoing payments. The last thing you want is to bounce a check, so review your bank balance every morning and transfer money if necessary.
- Consult budget before making any purchases. If your bank balance is positive, that doesn’t mean you should run out and spend that money just because you have it! If you need to make a purchase for your business, consult your budget first.
- Invoice clients. If you did the work, then send your customer their invoice. You won’t get paid if you don’t!
- Pay contractors & bills due. If you have any bills that are due or contractors that you owe, pay them!
- Record payments made/received & other transactions from bank feed. All financial transactions that your business has should be recorded in your bookkeeping software. If you set up a bank feed into your software, most of the work is done for you. It’s best to stay on top of this weekly, while the transactions are fresh in your mind. I don’t know about you, but I can barely remember what I had for breakfast this morning, never mind what I bought at Staples 6 months ago!
- Run payroll (weekly, bi-weekly or monthly). Your employees want to get paid, right? This one is non-negotiable.
- Transfer money for sales tax collected, payroll taxes, estimated income taxes & savings goals to savings account. I often see small businesses get behind on sending their sales tax payments to their state. Why? Because they see the money sitting in their checking account and they use it for something else. Don’t let this happen to you! Each week, transfer the amount you collected in sales tax to another account and leave it there until you need to send in a payment. Do the same for payroll taxes, estimated income taxes and any savings goals you have for your business.
- Save & organize receipts. The IRS requires you to save all of your receipts. If you are audited, showing them a bank or credit card statement isn’t good enough. You must have the itemized receipts. Keep them organized in a way that works for you. It could be by vendor, by date, or by category. Please, no shoe boxes! 🙂
- Follow up on unpaid client invoices. Chances are your client forgot to pay your invoice. Send them a gentle nudge with a friendly reminder email.
- Reconcile bank accounts. If you’re using bookkeeping software and you’re keeping up on recording transactions weekly, then the reconciliation process should be quick and smooth. Learn more about why this process is so important.
- Remit sales tax (monthly or quarterly). Depending on your state and the amount of sales tax you collect, you will have to send in payments and file your reports monthly or quarterly. Do your best to not get behind on these payments. The penalties and interest can really add up and will cause greater cash flow issues for your business.
- Check inventory & assess status. It’s important for the health of your business to stay on top of your inventory and know what is selling well and what isn’t. It’s best to evaluate it on a monthly basis and determine what the trends are.
- Review Balance Sheet, Profit & Loss Statement & budget. Many business owners never look at their financial statements throughout the year. They wait until year end to review how they did, but by then it’s too late to make any changes.
- Make estimated income tax payments. If you’ve been putting a portion of this money in a savings account each week (see above), it’s less painful to make these payments. These payments are due on:
~April 15 (for January – March)
~June 15 (for April – May)
~September 15 (for June – August)
~January 15 (for September – December)
- Make quarterly payroll tax payments. If you’ve been putting a portion of this money in a savings account each week (see above), it’s less painful to make these payments.
- Send unpaid client invoices to collections, if necessary. Probably the last thing you want to do is send one of your clients to collections, but sometimes that’s the only way to get paid. If you’ve exhausted all other means of collecting what is owed to you, this may be your last chance to get paid.
- Run reports requested from accountant. If you’ve been consistent with all of the bookkeeping tasks listed above, your books should be in pretty good shape for your accountant to file your taxes. Don’t wait to send her what she needs.
- Year-end inventory analysis. Just as you reviewed your inventory each month, you should review it at year end and make any necessary changes for next year. What sold? What didn’t? What items would you like to add to your offerings?
- Review budget & reassess your salary, profit, tax savings & expenses. Did you meet all of your financial goals? What lessons did you learn this year? What could you have done differently?
- Create budget for new year. Take what you learned from last year and apply it to next year’s budget. Do you want to earn a higher salary? Do you want to give your staff a raise? Do you want to add another revenue stream? Build all of those things into your budget.
- Send 1099s to contractors & W-2s to employees. The IRS requires you to send 1099s to everyone that you paid $600 or more to for services rendered. (Exception: If you paid them through PayPal, PayPal handles the reporting.) You are also required to send all employees W-2s regardless of how much they earned.
- File year-end payroll reports. If you are using a payroll service, they may file these reports for you or at the very least prepare the reports for you to file.
I know this seems like a lot to remember and it is, but it’s vital for the financial health of your business that you stay on top of your bookkeeping tasks. I’ve created a handy bookkeeping checklist to help you do that!
Have questions? Please leave a comment or send me an email. I’m happy to answer any questions that you have!