The accounting monitors your money, including purchases, sales, liabilities, and payments of your business accounts. Some of the essential tasks involve bookkeeping (recording financial transactions), Creating financial reports, filing tax returns, and so on. Accountancy helps you gauge the health and value of the company to make better decisions about short- and long-term success.
Daily Accounting Task
If you take a close look, accounting is a daily task because every day there would one or other transactions. Without neglecting it, Let’s take a look at daily tasks.
Cash Position Management
It is your duty at the beginning of each day to ensure you have enough cash at hand. It is essential to understand how much you pay and earn weekly to determine how much money you will operate on a routine basis.
Weekly Accounting Tasks
A little more is needed in weekly accounting activities. Welcome to your weekly accounting activities.
Report each transaction every day or monthly, depending on the amount. Although manual or Microsoft Excel sheets can be used to document transactions, it is generally better to use applications such as QuickBooks for small business accounts.
Maintain A Record of Receipts
Keep copies of all invoices issued in cash (cash, check, and credit card deposits) as well as in money (cash, check, and credit card deposits). Start an alphabetically ordered vendor file to enable access. Build a payroll file sorted by payroll date and a month-sorted bank statement file. A typical practice is to dump all paper receipts into a box and attempt and decode them at tax time. Still, if you don't have a minimal number of transactions, it's easier to arrange separate files for various receipts as they arrive. Many financial accounting software systems let you scan receipts from paper and entirely avoid physical data or bookkeeping records.
Review Outstanding Vendor Bills
Every company should have a folder called "unpaid vendors." Keep a list of each of the vendors, which includes billing dates, due amount, and due dates for payment. If vendors offer prepayment discounts, you may wish to take advantage of this. Track your accounts payable and have funds available to pay your vendors on time, so you avoid late payments and unhappy partners.
Make sure to include the terms and conditions of payment. Many of the invoices are due within 30 days, noted at the bottom of the invoice as "Net 30." You will have more trouble predicting monthly sales without a due date.
Projected Cash Flow Analysis
Managing your cash flow is crucial, especially in your first year of existence. In the coming weeks and months, estimating how much cash you will need will help you save some money to pay bills for your workers and suppliers. Plus, you can make business decisions more educated on how to invest it. All you need is a clear statement showing your current cash status, expected cash receipts, and planned cash payments for that time. This is regarded as a cash flow statement.
Monthly Accounting Task
Now let me take you through your monthly tasks.
Keep the Checkbook of Your Business Balanced.
Balance your bank account. Ensure all company expenses are accurate and operate monthly with correct cash flow positions. As such, you are reconciling your cash allows you to discover and correct errors in time.
Analyse Past-Due, or Aged Receivables
Specifically hold a column for aged invoices with the number of days, it is due. It is highly recommended to send out a reminder at the start of each month for overdue statements to clients. As such, you will decide at the end of the fiscal year which receivables are to be submitted to collections and which ones to write off as a deduction.
Analyze The State of Inventories
To avoid being either short-handed or overwhelmed, it is essential to keep track of product mobility. Keep track of which products move quickly and which move slowly, and assess a strategy to either markdown or write off goods with sluggish sales.
Review Payroll And Accept Tax Payments
It is necessary to meet payroll tax requirements at the federal and provincial levels and, therefore, withholding, reporting, and deposit relevant social security, healthcare, income tax, and disability taxes on the correct dates to the appropriate authority.
Review Actual Profit and Loss account, And Compare With Previous Years
The statement of income shows you how much you earned and how much you have spent. A measure that compares your actual figures to the expected numbers against your monthly budget see where expenses are high or low and make possible changes.
Review of Month-End Balance Sheet And Compare it With Prior Period
Compare an ongoing balance sheet vs. one from an earlier date; this will allow you to see what went up dramatically, and what went down, and understand why. It will enable you to manage your assets and liabilities.
Yearly Basic Accounting Tasks
While coming to the end of a working year, it is very important to keep your accounting books in order. Now go through some of the yearly tasks.
Keep Track of Internal Activities
Now is a perfect time to double-check the internal controls that you already have in place, and create fail-safe procedures where possible. There are some good reasons to establish and stick to internal control operations, such as keeping correct financial records, prevent theft, and early detecting embezzlement.
Keep Track of Payroll Enforcement.
Obtain employee forms by January 31, which include bonuses received or unique gifts. Not only does this relax frustrated staff, but it also avoids significant sanctions. Do not risk being charged with a federal crime.
Recollect Accounts Receivable
Based on research, it is found that up to 29 percent of startup failures are attributed to cash crises. Target to close out all remaining receivables before the year is done. A strong drive to collect as much as possible and to clean up reconciliation problems will allow you to retain significant control over the cash flow of your company.
Income Tax Plan
To reduce your bills and reap future savings, now is the time to recognize tax needs and work with a tax pro. Invest time now to prevent unexpected surprises and save your company serious money.
Make Sure You've Got The Green To Go
Based on research it is identified identified "running out of cash" is the second-largest reason for startup failure. Don't get stuck in January, wondering if you've got the money set aside for the first-quarter sales hire you've been planning or purchasing the new piece of equipment you've been watching since the summer. Get in touch with your stakeholders and compile a budget plan for the year. Involve investors to make sure all your fiscal ducks are in a row.
Tax preparation doesn't suit new companies. Not only does it threaten a potentially harmful financial fallout, but it also damages company morale and paints you as disorganized. Not having up-to-date books or a plan to file taxes correctly and on time may hinder growth.
Jaxa has experts who can make your accounting process a cakewalk. Speak with our professional chartered accountant as early as possible. Don't worry about the present covid19 outbreak situation, our experts can speak to you through video call and can help you with the process. If you take action now, you can tick these concerns off your checklist and be prepared when taxes come due. Feel free to contact us!