Solidifying A Better Future For My Kids

Solidifying A Better Future For My Kids

Three Bookkeeping Tasks Every Small Business Owner Should Keep Up With

Jackie Watts

As a new business owner, you're probably figuring that your bookkeeping tasks can be put at the bottom of the priority list. After all, as long as all of your notes, receipts and records are tossed into a box together, you can catch up later, right? Maybe. Unfortunately, this kind of bookkeeping approach often leads to accounting nightmares because things get overlooked. Before you dismiss your bookkeeping tasks as unimportant, understand that at least these three things should be prioritized for the financial health of your new business.

Creating Performance Reports

The basic financial reports, including balance sheet statements, income statements, cash flow statements and retained earnings statements, provide a clear picture of your company's financial health and your business activities. If you don't know how much money you're making (or losing), where your cash is going or what assets you have on the books, you're not going to be able to make essential operational decisions. Creating these reports on a monthly (or even quarterly) basis may allow you to spot areas of financial loss before they directly affect your company's operations.

Reconciling Bank Statements

Most young adults learn how to balance a checkbook when they get their first checking account. You may not have realized that those same skills would be beneficial for your business. You need to keep track of all of your bank account activity throughout the month and spend the brief time to reconcile that information to your bank statement once a month. This task is essential, because there may be overdraft fees, bank maintenance fees and other costs that you aren't aware of. Additionally, reconciliation helps you identify any potential errors, such as unauthorized withdrawals or mis-posted checks.

Accounts Payable

If you have outstanding invoices that need to be paid, they're recorded in the accounts payable ledger. Failure to keep up with this account can result in missed payments, late fees and the loss of your company's valuable credit standing. Review your accounts payable reports at least once a month to be sure that everything is being paid on time.

Monitoring your accounts payable also helps you to understand exactly what you're paying for services and where your cash is going. If you don't monitor this activity, you may never identify a vendor that's billing you incorrectly or one that's been double-paid.

There are many other aspects to business bookkeeping, but these three should be prioritized if you lack the time and ability to keep up with all of the rest. As another alternative, you can contract one of the local bookkeeping services, such as Everything QuickBooks, to help you.


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About Me
Solidifying A Better Future For My Kids

One day a few years ago, I was forced to take a good, hard look at my finances. I realized that my husband and I were living outside of our means, and I knew that we needed to make some changes and fast. I started looking for ways to spend less money, and I was able to completely eliminate some of our largest expenses. It was a lot of work, but it really helped us to feel more free financially. This blog is here to help other people to spend a little smarter and to avoid the hassles that come along with spending more than you have.

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