Do you often find yourself sitting at your workplace crammed with a terrifying pile of unattended
bank statements, receipts and logbooks? It's time to simplify your business accounts!
Here are 6 essential tasks that skilled accounting personnel perform to keep your company financially healthy.
Accounts Payable & Receivable: Maintain a Separate Folder
Keeping tabs on the money you owe to others is very
important. You must maintain separate folders for your vendors.
Similarly, checking customer receivables is equally crucial because
unpaid accounts result in debt expenses and other monetary issues.
Keep a record of crucial factors like payment due date, amount due,
billing date etc. and check it every week. Also, calculate your
payments, sign cheques and keep them in separate envelopes labelled with
vendor names.
When you outsource this task to professional
agencies, they use efficient software like Excel, Google Sheets or
QuickBooks to quickly sort and manage this data.
Pick a Date to View Copies of all Receipts and Invoices
Tossing hard copies of receipts and invoices into a box
until tax time is a common habit. Unless you handle a small volume of
transactions, it's better to save all copies of cash deposits, cheque
receipts, bills and card statements.
Nearly all professional accounting companies maintain an e-database of
important paperwork by scanning the hard copies. This is beneficial for
small companies as they do not have to worry about cluttered office
space or sorting a massive pile of papers in different folders.
Review Employee Payrolls
It's imperative to review employee timesheets every week,
even when your payroll is on a monthly basis. If your employees stay
back and work for longer durations, you're on the hook for overtime pay.
Therefore, checking timecards every week is a great way to avoid
overtime liabilities.
Compare your P&L with your Weekly Budget
If you aren't careful about your expenses, you will
quickly exceed your monthly budget. Unrecorded spending can get out of
control very quickly. Make wise spending decisions by comparing your
weekly budget with your projected month-to-date profits and losses, once
a week.
Weekly Bank Reconciliation
Banks send their account statements either monthly or
bi-monthly. You must match all the credits and debits with your account
statement (a process known as reconciliation), every week. This way, you
don't have to worry about accidentally overdrawing your account, and
you'll have enough cash to run your business.
Evaluate the Projected Cash Flow
Managing cash flow is critical for small businesses and
start-ups. Forecasting the amount you will need in the coming week will
help you keep enough cash to pay your suppliers, employees, and other
bills. Categorise this information in the form of a customisable cash
flow statement. It will help you make more rational business decisions.
Handling business accounting tasks are like eating
spinach-you may not like it, but you must do it as it is crucial. Many
businesses fail due to lack of proper knowledge or skills and
inconsistent management. This is why those who've just started a new
venture usually hire professionals for bookkeeping and managing
financial accounting records.
Companies have a lot on their plates and need external
help to manage all reports, transactions and receipts. Therefore, hiring
an expert who can do the drudgery for you will make you less
susceptible to poor business practices. This way, you can focus more on
your core business ideas.