Strong bookkeeping and accounting are crucial for the success of a small business. Some small business owners may believe that because their business is more reliant on cash flow, they don’t need to learn the details of accounting for their business. However, if you run your small business’s finances the way you run your personal finances, you may create problems. To avoid any financial mistakes for your business, here are a few small business accounting basics you should do every week.
Reconcile Your Bank Account
As a small business owner, you can’t reconcile your bank account too much. Reconciliation means that you are ensuring that you have the cash you think you have, which is crucial for any business. Some people wait for a monthly bank statement to reconcile accounts, but that can take a long time, especially if any mistakes occurred. With the availability of online banking, you can reconcile your account anytime you like as long as you have Internet access.
A helpful accounting practice for any business is to establish a system for vendor payments. This will help you keep track of your debts and help you and your business develop an excellent professional reputation.
Weekly check-ins with vendors are efficient because your vendors often have different payment preferences. Reminding yourself of who needs to be paid this week will save you from problems in the future and save your bookkeeper some extra work.
Happy customers are essential for any business, and if you mishandle a customer’s payment, they will most certainly be unhappy. Make sure your customer receipts are recorded in a timely fashion, daily if you can. However, daily schedules can be unpredictable, so making time at least once a week to record receipts helps you stay up-to-date.
Remember to mark the date the payment was received and not the date you are recording it.
Small Business Accounting
While vendor payments and customer receipts are weekly responsibilities, other expenses always pop up for small businesses. Interest payments and bank fees, for instance, may need to be recorded.
As you continue to do these small business accounting tasks weekly, you will develop the rhythm and system that works best for you. The critical thing to remember is that without legible and well-documented finances, any business can fall apart. It’s key to stay on top of your finances so your small business can be the best it can be.
trust the professionals at the harding group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.