As a small business owner, there are few tasks that are more important to successfully manage your business than bookkeeping. Staying on top of your bookkeeping will not only help you ensure things run smoothly in your business, but it can help you identify any potential financial issues from the get-go—and deal with them before they spiral out of control.
But if you’re not a finance or number person by nature, managing your bookkeeping tasks can feel overwhelming. Which bookkeeping tasks do you need to do every day? Which tasks do you need to tackle every week? How about on a monthly, quarterly, and annual basis?
It’s a lot to navigate—and if you want to stay on top of all your accounting tasks (and stay on top of them at the right time), having a checklist can help.
Let’s take a deep dive into the essential bookkeeping checklist for small businesses—and review a) which bookkeeping tasks you to need to to tackle for your business, and b) when the right time to tackle those tasks is:
Why do you need a bookkeeping checklist?
Before we jump into the essential bookkeeping checklist for small business owners, let’s quickly touch on why it’s so important to have a bookkeeping checklist in the first place.
There are a number of reasons why having a bookkeeping checklist is a must for your business, including:
- A checklist will help keep you organized. A bookkeeping checklist makes it easy to keep your business financials organized; you know what you’re supposed to do, when you’re supposed to do it, and can check off each task as you work your way through them.
- A checklist will make sure nothing falls through the cracks. There are a lot of accounting tasks you need to perform to keep your business running smoothly—daily tasks, weekly tasks, monthly tasks, quarterly tasks, and annual tasks. It’s a lot to keep track of! Having a checklist helps ensure that no tasks fall through the cracks—and you successfully complete all the necessary bookkeeping to-do’s for your business.
- A checklist can be helpful if you want to pass the bookkeeping responsibility onto someone else. At some point, you might want to pass your bookkeeping responsibilities onto someone else (for example, if you hire a controller or outsource your financial tasks to a bookkeeper, a CPA, or an accounting professional that offers bookkeeping services). Having a bookkeeping checklist makes it easy to train and onboard someone to take over your business bookkeeping—and gives them a concrete list of all the new tasks they’ll be responsible for.
The essential bookkeeping checklist for small businesses
Now that you know why a bookkeeping checklist is so important for your business, let’s jump into the accounting tasks you’ll want to include on that checklist:
Daily bookkeeping to-do’s
- Review your cash position. You always want to have a handle on your business’ cash flow; you want to know how much cash is coming in, how much cash is going out, and how much cash you have on hand. That’s why, every day, it’s important to review your cash position, both at the beginning and the end of the day.
- Update your bookkeeping software. If you use a financial/bookkeeping software, you want to keep it as up-to-date as possible; that way, you have a clear picture of your business financials and can run accurate financial reports when necessary. At the end of each day, check your software to see if there are any client payments or expenses that need to be recorded and categorized—and, if so, get them done before you head out for the day.
Weekly bookkeeping to-do’s
- Review and reconcile your business bank accounts and credit card accounts. The sooner you spot any inconsistencies on your business bank or credit card statements (for example, an unauthorized charge), the faster you can resolve the issue—which is why you should plan to review and reconcile your accounts on a weekly basis.
- Review and pay invoices. If you work with any vendors, you want to make sure you’re paying them on time. Every week, make sure to review your open invoices, check deadlines, and pay any vendors as necessary.
- Send invoices. The more frequently you send invoices, the more frequently you get paid—so instead of waiting until the end of the month to invoice your clients, send an invoice every week. Also make sure to include payment terms so your clients know when their payments are due.
- Upload your receipts. If you’ve made any business purchases during the week, you’ll want to scan your receipts and upload them to your bookkeeping software. (You should also file and keep the paper copies as a backup.)
Monthly bookkeeping to-do’s
- Run payroll and make payroll tax payments. You can choose to pay your employees on a weekly, bi-weekly, or monthly basis—but you need to be running payroll at least once per month. You’ll also need to make the appropriate payroll tax payments, both federal and state. (Many payroll providers—including Hourly—will automatically calculate accurate tax withholdings and any necessary tax payments.)
- Review your balance sheet. Reviewing your month-end balance sheet can give you a sense of your financial performance for the month, how your performance compares to prior months/prior years, and any areas where you can stand to improve.
- Follow up on past-due invoices. At the end of the month, review your accounts receivable. If you have outstanding, past due invoices, you’ll want to follow up on payment at least once a month (more often if the invoice is seriously past due).
Quarterly bookkeeping to-do’s
- Evaluate your annual profit and loss statement. While you want to always have a handle on your business financials, taking a deeper look at your annual P&L statement once per quarter can help you get a big picture view on the financial health of your business—and make any adjustments to your operations, finances, or business strategy as necessary.
- Pay estimated taxes. Every quarter, you’ll have to pay a variety of quarterly employment taxes, including federal unemployment (FUTA), state unemployment (SUI), and any applicable local taxes.
- Submit quarterly payroll reports and payments. As an employer, you’re required to submit quarterly payroll reports to the IRS (and, depending on where you live, to the state) and make quarterly payroll tax payments (including unemployment taxes). Depending on how you compensate yourself, you may have to pay self-employment taxes on your income.
- Pay sales tax. Depending on your state, you may also be required to pay quarterly sales taxes.
Annual bookkeeping to-do’s
- File any necessary IRS forms. Depending on your employee structure, you’ll need to file IRS Form W-2 (for all employees) and Form 1099-MISC (for independent contractors) each year. You’ll also need to send copies to your employees/contractors.
- Collect any outstanding debts and close out your books. If you have any open invoices or outstanding debts, you’ll want to collect them before year-end. Once you’ve collected any outstanding payments, you can close out your books for the year.
- Create your year-end financial reports. Once you’ve closed out your books, you can create year-end financial reports that give you an accurate picture of your financial performance for the year—which you can then approve and pass off to your accountant for tax purposes.
- Gather the necessary information for your taxes. In addition to your year-end financial report, your tax professional will need a variety of additional documentation in order to accurately prepare your tax returns and move forward with your tax filings (like your bank statements, payroll reports, and other financial statements). Make sure you gather all that information at the end of the year and have it ready to pass off to your accountant.
- File your tax return. Filing your business taxes is one of the most important annual bookkeeping tasks, so make sure you file (and file on time and before any relevant tax due dates!) each year.
Check each of these tasks off of your bookkeeping checklist
Managing your finances can be a challenge. But now that you have this basic bookkeeping checklist, you have a list of all the tasks you’ll need to complete in order to take care of your business financials on a daily, weekly, monthly, quarterly, and annual basis—and protect the financial health of your business in the process.