Do these tasks on a daily basis:
- Recording transactions
- Customer invoicing
- Depositing physical cheques
Take care of these tasks on a weekly and bi-weekly/semi-annual basis:
- Cash flow reports: It is important to take a step back and determine where you are each and every week.
- Running periodic aging reports will improve your cash flow by helping you stay ahead of past due balances.
- Run payroll on a regular basis.
Before moving into a new month, it is vital to close the books on all financial transactions for the month just completed. Reconcile balance sheet accounts and verify the accuracy of your income statements.
Reviewing transactions on a monthly basis allows you to catch errors and fix them quickly so they do not carry over to the next month. You can also correct transaction categories, which will help you maintain consistent data so you’re always comparing apples to apples.
In addition to keeping your books accurate and up-to-date, month-end closing helps prevent fraud by exposing any financial irregularities, such as unauthorised debits or credits.
Monthly tasks include:
- Documentation of accruals
- Recording and checking all journal entries
- Reconciliation of bank and credit card reports
- Running critical monthly reports (e.g., income statement, balance sheet, cash flow statement)
Complete these tasks on a quarterly basis:
- Run an accounts receivable aging report, showing which customers are past due and by how much.
- Take inventory to make sure you are not carrying too much or too little and that your Days Sales Inventory (DSI) is in order.
- Review quarterly reports, which investors often require, against your standard monthly reports to make sure your numbers are consistent and to gain insight into short-term trends.
- Pay your quarterly estimated taxes.
Perform these annual tasks: Your year-end accounting tasks are also a good time to review your previous year’s business plan and budget forecasts and compare them to your actual performance.
