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15 Must-Know Bookkeeping Checklist Items For Business

Small and medium-sized businesses must maintain specific bookkeeping processes for efficiency. Since staffing is often limited in smaller companies, businesses can have a lot on their plate and it can be easy to overlook some crucial financial responsibilities. 

Having a checklist to ensure that everything is well accounted for can be the difference between success and failure for your small business. With a bookkeeping checklist on hand, you get to keep your focus where you need it the most: your sales revenue. 

A checklist is a resource that will help you in several ways:

  • Your business will stay organized.

  • You can understand your financial position quicker 

  • You can identify errors in the business flow earlier 

  • You will have the required information prepared when hiring a bookkeeper.

Try incorporating our take on the daily, weekly, monthly, and yearly checklists in your business with these important bookkeeping checklist items.

Daily Bookkeeping Checklist

1. Cash-on-Hand Review

Each morning, start the day with a quick check of your cash on hand. It is wise to keep enough money available to cover unforeseen situations that may arise. 

Cash on hand is the cash accessible by the business. It includes both your bank account and your petty cash in the office. Having a daily habit of reviewing your cash position will make you prepared to handle unexpected expenses. 

Keeping cash flow documented is imperative. You should note any payments made to or from the petty cash or other accounts as soon as possible to account for any cash imbalances. Finish the day with a second review to ensure the information is accurate and current. This also prepares you better for the next business day.

2. Account For Daily Expenses and Revenues

You should make time to record all revenue and expenses daily. Having these records will keep you up to date to check against your cash on hand. In case of a mismatch, you will be able to remedy it before it gets out of control. 

Proper cash flow management will make your business more prepared for the days to come. Neatly annotate all inflow and outflow, like bills paid and the daily sales totals, which will help keep your accounts up to date.

The bookkeeping software your company uses is likely to offer comprehensive reports. Use this tool to verify that the accounts match the official numbers. Proper bookkeeping keeps you apprised of where the accounts stand when business begins.

3. Categorize Transactions

A business has more than one expense and often more than one income stream. Categorizing transactions provides a way to see at a glance where things are headed and to better manage finances.

The main category heads for daily evaluation are credit and debit: income and expense. Expenses may include utilities, rent, raw material, or parts whereas income may be sales or service revenue. 

Breaking down transactions and categorizing them in records can help in three ways:

  • Easier to claim and reduce tax on business expenses when owners have categorized personal and business expenses

  • Owners or managers can keep a check on the distribution of payments and receipts across categories and see if there’s any that can be increased or cut down for profit.

  • Preparation for audits or end-of-fiscal-year (EOFY) reports

Weekly Bookkeeping Checklist

1. Review Bills

Every business has bills to pay. Keeping on top of upcoming bills and their deadlines will prevent overdue payments and late fees. It will also boost the company's reputation when it pays its bills on time.

Some of the bills that you should go over include:

  • Rent: If your company leases a physical location, paying rent before it is due is favorable.

  • Utilities: Electricity, water, phone & internet service are all crucial to running a business. A physical location without power or loss of internet service can severely impair business communication.

  • Insurance premiums: A liability unmanaged can cost a small business a lot. Maintaining insurance to prevent bankruptcy can be indispensable to some companies. 

  • Credit cards and debts: Pay loans and credit cards promptly to improve the business's credit. 

  • Vendors & Suppliers: Make sure to pay your key accounts payable within the time as well to maintain your credibility and secure future support.

2. Send Invoices

Day-to-day business can often get in the way of invoicing clients on time. You can't blame the customer whose payment was overdue because of a missed invoice. Additionally, an invoice reminder for unpaid invoices may become necessary.

Check for both paid and unpaid invoices to be sure you have recorded them properly and sent them promptly. Customers dislike getting second reminders for invoices they have already paid. They also dislike making late payments for invoices they did not receive as it can impede their own process flows.

Note payment terms when assessing invoices. Clients need to know when to pay and what form the payment should take. Make sure to include payment methods and your process to handle debt collection when discussing invoices.

3. Check For Open Purchase Orders

Open purchase orders (POs) are orders that are in process but are not yet invoiced. It is not a bill or a payment until it is a closed PO and you have completed the transaction. An open PO may be due to partial fulfillment of an order or recently placing an order with a vendor.

Recording open POs will help small business owners have an accurate picture of expenses, while making sure correct journal entries are recorded only when the PO has been closed. Owners can also identify if there are any unusual delays in the PO closure on part of vendor or the business itself and take action accordingly.

4. Reconcile Bank Accounts

Reconciliation is the next step once bills have been reviewed, invoices sent and recorded, and POs and vendor deposits dealt with.

Reconcile bank and credit card accounts by verifying that your journals match the bank. Match starting amounts, income, outgo, and ending amounts (making adjustments for outstanding transactions).

Look for errors such as a missed entry or a double transaction which are easy to make but not always easy to find. Additionally, you should be looking for failed transactions and watching out for any financial activity that could be problematic in the case of an audit or security check.

Even though it is commonly a monthly practice for larger businesses, it would help a small business to reconcile accounts and credit cards weekly and adjust for any errors to avoid error build-up that may be difficult to trace at month end.

Monthly Bookkeeping Checklist

1. Update Bookkeeping Software

Using accounting software can be a lifesaver for a small business. Think about how time consuming it would be to search a physical ledger for a sale instead of having a software handy. 

However, using old, outdated software is worse than none at all. Security vulnerabilities and technical incompatibilities cause myriad problems if the software is not updated regularly. 

Keep in mind to also update the data regularly .A fully and timely updated software will produce accurate reports and financial statements for use. Businesses should check for any missing transactions, category heads, and other changes and make sure to record them to the software.

2. Update Payroll

Payroll is an integral part of every business. The government has regulations that you must follow when preparing payroll. Managing payroll can be daunting for businesses as they onboard new employees.

Every month, update payroll reports and check that you have met superannuation and payroll obligations. Other elements that you need to include are:

  • Update new employee details

  • Record and provide payslips

  • Make payroll tax payments.

  • Report to ATO using Single Touch Payroll.

Payroll is a need for any business that has employees. Using the right tools and keeping on top of it makes the job easier.

3. Review Inventory

Managing and tracking inventory is crucial for business success. As a small business owner, you want the right amount of inventory. Too much can cause issues in storage or spoilage, while too little can cause a loss of sales.

Timely inventory management limits shortage and excess problems. It can be useful to account for stock requirements for the coming months - which can then trigger a timely order process across the supply chain.

Try to invest in a resourceful inventory management tool where you can input each item and any variations. The right software provides credible reports to predict upcoming stock requirements and reviewing them monthly can keep your company on top of things. 

4. Check Up On Aged Receivables

Aged accounts receivables are customer invoices that have not yet been paid. Send reminders to your accounts receivables about past-due invoices to encourage timely payment. When checking these invoices, look out for missed invoices or doubled charges, and take appropriate corrective measures. 

The amount of aged receivables present at a time can be an indicator of financial health and the lack of timely payments can create problems in the cash flows of a small business. Default by a debtor indicates that you should reconsider dealing with that company. Reviewing aged receivables monthly and use them to choose who you do business with to maintain future cash flows.

EOFY Bookkeeping Checklist

1. Clear Year-End Debt & Invoices

Finishing up the fiscal year means finalizing information for annual reports. Your business will want to prevent carryover through debt settlement and payment collection. Check for unpaid invoices from vendors and unpaid invoices to customers and contact them as needed.

Double-check the receipts and invoices to ensure you have accounted for them all. Make sure you have categorized and filed them properly to find them easily in case of an audit. 

The less you carry over to the next fiscal year, the better off you will be. Once you have finished settling things, you can prepare your annual financial reports.

2. Prepare & Review Financial Reports

With all the transactions settled, you are ready to create your yearly financial reports. Your key financial statements include:

  • Balance sheet

  • Cash flow

  • Changes in net worth

  • Income statement

  • Shareholder equity

Some companies include a list of financial goals for the upcoming fiscal year as well. You can see the progress of the business in achieving the goals set at the end of the previous fiscal year and prepare for the upcoming year appropriately.

3. File Tax Returns

The end of the fiscal year also indicates the time to file taxes. Your tax accountant will need the financial reports and supporting documents for this task. 

By this time of the year, a small business should have some taxes already accounted for. These taxes may include:

  • Capital gains tax

  • Fringe benefits tax

  • Sales tax (GST)

  • Income tax

  • Pay As You Go (PAYG) withholding tax

Filing tax returns for tax paid throughout the year, can be beneficial in two ways: a tax claim on business expenses and possible tax concessions.

As a heads up, make sure you choose your tax agent wisely. Check the Tax Practitioners Board to verify that the tax agent is legitimate. More importantly, be vigilant about tax refund scams and check for scams on the government scam alert website to stay informed and aware.

4. Backup Files

While computers are a wonderful asset, consider the effects of a catastrophic malfunction. If you lost your financial information, could you recover it? Keep financial information safe through proper backup and secure storage.

Data that needs enhanced security can include:

  • Customer data

  • Financial information

  • Registration details

Make sure to encrypt digital documents. You can then store the encrypted files in cloud-based storage, on an external hard drive, or on a flash drive. The latter two options should join your printed information in a locked cabinet for safekeeping and future use.

Final Word

Using a bookkeeping checklist can improve the efficiency of your financial processes. Feel free to use our provided checklist as an aid for your small business bookkeeping needs.

If you’re still a bit rattled, you could also hire a bookkeeping service to guide you better and provide you with a worry free bookkeeping experience so you can focus on achieving your core business goals.