A Simple Do Your Own Bookkeeping Checklist
Whether you run a small, mid-size, or large business, bookkeeping plays an integral part. Bookkeeping refers to the process of organizing and maintaining financial data and transactions to help you run your business smoothly and efficiently.
However, for good bookkeeping, you need to devote appropriate time to this chore, which can become overwhelming while caught up in your daily operations. For this reason, the experts at Misic Accounting have created a handy checklist on how you can handle bookkeeping tasks by yourself. Follow this checklist accurately so that you can do your books like a pro.
1. Refresh and update your financial data daily
Your accounting software should automatically sync your bank accounts and credit cards. If it doesn’t, you’ll have to do this manually. This will give you an up-to-date look at your accounts, showing you the money that’s flowing in and out of your business.
2. Reconcile your cash and receipts daily
Reconciling your cash and receipts on a daily basis will allow you to recognize shortages or overages quickly.
3. Reconcile your bank transactions daily
Since your accounting software automatically syncs your bank activity, you can address transactions regularly rather than waiting for monthly bank statements. Doing this daily will avoid the grueling month-end process.
4. Record and categorize expenses
Your accounting software should be able to link to expense reporting apps, like Dext. Utilize these to import your expenses and file your receipts by simply snapping a picture of them.
5. Record any inventory received
Enter any inventory you receive regularly. This will ensure that your system is up-to-date and you have the most recent and accurate financial information available.
6. Record payments you receive at least weekly
Record and reconcile any payments you receive on at least a weekly basis. This will keep you apprised of which clients owe you money and how much at any given point in time.
7. Invoice your clients
Billing your clients regularly helps them pay you on time, and it helps both yours and their cash flow. Make this a regular practice to avoid late billing and payments down the road.
8. Review your employee timesheets weekly
Make sure you review your employees’ timesheets on a weekly basis. Your client billing and payroll are affected by these, so you want to make sure it’s accurate.
9. Pay your vendors and suppliers monthly
Ensure you maintain good relationships with your vendors and suppliers by paying them on time or scheduling the payments to be made. You don’t want to overwhelm yourself and your finances in the future by postponing payments.
10. Track your financial performance and variances monthly
Put all the month’s data entries to use. Evaluate your business’ financial performance on a monthly basis using many of the reporting options in your accounting software. This will be a key driver to making important business decisions.
11. Backup your data
If you’re not using cloud-based accounting software, you’ll need to back up your data manually. This will give you peace of mind knowing that your information won’t be lost due to hardware failure or file corruption.
12. Adjust inventory and cost of goods sold yearly
Adjust the final month and any others for inventory, sold or marked down in value. This will give you an accurate view of the value of your inventory on hand and will expense any write-downs of inventory.
13. Record any amortization and depreciation yearly
Calculate and record any amortization and depreciation accumulated on your company’s fixed assets for the year.
14. Declare any dividends payable
Make sure you declare any dividends payable to the company’s shareholders.
15. Declare and record any bonuses payable yearly
You can declare bonuses payable to employees at year-end and still deduct them in the fiscal year, as long as they are paid within six months. This will minimize your taxes payable in the current year and could be a viable strategy for your business. Be sure to consult with an accountant to determine if it is the right strategy for you and your business.
16. Prepare your year-end financial statements for your accountant
Make sure you’ve reconciled all of your accounts and accounted for all business transactions. Your accountant will use this information to prepare and file your year-end business tax returns, as well as any sales tax returns.
17. Review your return with your accountant
It’s important to review your tax return with your accountant to determine your strategy for the upcoming year. Efficient tax planning requires an ongoing, long-term approach by regularly meeting with your accountant. This will ensure that you get as much benefit as possible in minimizing your taxes payable in the upcoming fiscal year.
18. Record any taxes payable at year-end
Make sure you record any taxes that become payable at year-end. You’ll get a truer picture of your finances as of the year-end.
19. Prepare your payroll documentation
If you have employees, you must submit their T4 tax slips for the previous calendar year by the end of February. You must file and submit T5 tax slips if you have paid dividends. Making sure to do this will avoid any potential fees imposed and keep your employees happy.
20. Review and assess the year
It’s important to assess the bookkeeping, payroll, tax, and accounting work that you’ve done over the year. Take this time to evaluate the quality of the work, time, and effort that was required to complete it. If you’re finding that your time is better used elsewhere or to generate income for your business, it is time to consider outsourcing your bookkeeping and accounting work. Always make sure that any effort you put into your business is providing you with a return.
If you have any concerns about doing your books or need assistance with your business accounts, reach out to the accounting and bookkeeping expert at Misic Accounting, serving in Kitchener, Ontario. As a Kitchener accounting professional, I provide our clients with peace of mind by offering accurate and timely bookkeeping services. I take care of your books so you can focus on building and managing your business. To learn more about my services, please click here. If you have a question, I’d love to hear from you. Please contact me here.
