Tax compliance is critical and can be complicated depending on your industry and location. This framework should help you identity the key processes to get your business running and avoid some of the most common mistakes. If you follow these steps and rigorously analyze your financial statements, your small business will be ready to carve out its piece of the market.
Your accounting software automatically syncs your bank and credit card feeds, and the sales data from the POS system, into your accounting software. This gives you an up-to-date look at your accounts, showing you the money moving in and out of your business. To mitigate the risk of cyberattacks, companies can implement cybersecurity measures such as firewalls, anti-virus software, and multi-factor authentication. Human error is one of the most common challenges faced by companies during year-end accounting.
- Adopt a reliable backup system that will protect your important accounting information on your phone or computer.
- Keep copies of all invoices sent, all cash receipts (cash, check, and credit card deposits), and all cash payments (cash, check, credit card statements, etc.).
- You may also wish to provide instructions for your funeral and for what happens to your body after you are gone.
- If suppliers offer discounts for early payment, you may want to take advantage.
- To ensure that year-end accounting is done correctly, it is important to understand the accounting cycle.
Without proper communication, team members may not be aware of their responsibilities, leading to delays and errors. Inefficient communication can also result in misunderstandings, which can further hamper the workflow. Finally, it’s essential to review your tax return carefully before filing to ensure that how to calculate operating cash flow you haven’t missed any deductions or made any mistakes. A tax professional can help you review your return and provide guidance on any areas where you may need assistance. In addition, asset accounts should be reviewed to ensure that they are up to date and accurately reflect the value of the assets.
New Business Checklist Step 1: Accounting 101
To help you bring in your money when you need it, we’ve created this incredibly simple invoice generator. Without receiving remuneration for your services, you’re running a charity rather than a business. Which, while admirable, won’t put food on the table for you and all your staff. Accounting is vital to the health of a business and too many companies overlook it. In the UK, the Association of Accounting Technicians revealed that SMEs were “leaking” £2.9bn every year through poor accounting practices.
Generally speaking, the younger the unpaid invoice is, the more likely you’ll be able to coerce a payment out of the client in question. 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. Check with your accountant to see what information they need from you to close your books at year-end and prepare for the upcoming year and tax season. Be understanding, patient, and positive when you reach out to late-paying customers. Make sure you check these eight procedures off your year-end accounting closing checklist before the year officially comes to a close. Before the clock strikes midnight on December 31, you need to square away several accounting tasks.
- If any are found, they must reach out to the employees involved for missing information or documentation to resolve the discrepancies and adjust the financial ledger accordingly.
- While you’re at it, identify trouble spots, and make adjustments to improve sales and margins.
- All of these functions and more can be incorporated in to your free accounting checklist.
- The goal is to prepare a final financial statement for potential external audit, to be stored within the company’s official financial records.
So if your checkbook, bank accounts, and general ledger don’t align, there’s an error somewhere that needs addressing. On the other hand, if everything lines up perfectly, you can breathe a sigh of relief (until the next month rolls around). A single fat-fingered number can lead to incorrect financial statements. Let alone if a cybercriminal gets their hands on proprietary company data. Or if an employee submits fraudulent expenses that generate a material loss for your business. Billing your clients on a consistent schedule can reduce late payments.
Step 2: Reconcile Cash and Receipts
Financial ratios such as operating margin, debt-to-equity ratio, and return on assets help you further understand the health of your business. Our monthly general accounting checklist template will allow you to effectively delegate work to your team members without batting an eye. Using the checklist, they will understand the minute steps it takes to get the work done. Since they have a guide to follow, they will be able to competently complete work without needing your input or making mistakes. Our monthly general accounting checklist template will help make the process simpler and more efficient for your firm.
How our Monthly General Accounting Checklist Template will help your firm
You can also take a look at your accounts receivable aging report to verify if there is any unpaid invoice or not. If you receive paper checks and cash payments, deposit them weekly to keep your cash flow healthy and your records up to date. Doing some accounting tasks daily will make your recordkeeping easier, make inventory management more efficient and expose costly mistakes sooner. This estate planning checklist will help you to do all that you need to ensure that your wishes are met and to simplify the process for your loved ones. Also, you can include other tasks because every accountant has an individual checklist.
What are the common mistakes to avoid during year-end accounting?
If not, scanning these documents to turn them into digital ones is recommended. Scanning these vital documents will help serve as a backup system in case they are lost or destroyed. In the long run, digital copies will be significantly easier to deal with, as modern accounting technology can access them and expedite processing their contents.
How to make the annual close easier
This is one of your key reports for itemizing what the company owes and owns. This checklist guides you through what documentation you will need to consult, how to structure and record your report, and how to work out the important final figures. This process brings all of the different employees involved in the process, into the conversation. They each fulfil their respective tasks and the expense is dealt with smoothly and quickly, with each action documented for later audit. Connect the Process Street checklist to Zapier to automatically fire your data into the generator with our Zap.
Tips that will Increase Your Bookkeeping Firm’s Productivity
When you create a bookkeeping process for your new business, find what works best for you. It’s crucial to keep your records updated and check in with them at least once a week. Sending invoices notifies your customers about a payment, but you’ll still need to find a way to accept that payment. Any good workflow tool worth its salt will have templates as well as the ability to create your own.
We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. The online checklists summarized here are for use in reporting under International Financial Reporting Standards (IFRS); for specific jurisdictions, please contact us.