Managing the financial elements of your small business is essential to both accurately tracking annual business revenue and measuring your success/growth over time. Not only that, but by making sure you accomplish certain accounting tasks on a regular monthly basis, either through an accounting software or by working with an accountant, you make your end of year reconciliations and tax season much easier for yourself.
So, there are a lot of reasons to manage your accounts or work with an accountant to manage your accounts on a monthly basis. In this article, we’re going to cover the essentials you should know about monthly accounting. This’ll include things like what accounting services do small businesses need, general ledger accounting, and what small business accounting services you or your accountant should do regularly. Then, we’ve compiled a monthly accounting to-do list that either you or your accountant can follow each month to maximize your financial wellbeing and potential for growth.
Accounting tasks regularly tend to stack up in a neat little pile on the corner of your desk. As a small business owner, you tend to wear many hats. And “accountant” is often the hat that gets neglected the most. That’s why many small businesses tend to utilize accounting software or work with an accountant to accomplish their major accounting tasks.
But why is accounting, specifically general ledger accounting, so important? And why should owners ensure their small business accounting services are utilized on a monthly basis? We’ll cover this more in detail later, but here’s a brief overview:
From gaining a better understanding of annual business revenue to getting a better handle on general ledger accounting, performing monthly accounting tasks helps small businesses not only succeed, but thrive.
Small businesses need to perform accounting tasks for their businesses at least once a quarter. However, performing those tasks on a monthly basis saves small business owners and their accountants time and energy come tax season and end-of-year reconciliation. So what accounting services do small businesses need to perform monthly to ensure they’re running effectively?
Let’s cover the top five monthly tasks small business owners or their accountants should perform.
Make sure your accountant or your accounting software has tracked all income and expenses for the month. Are all transactions in the correct accounts? Have you or your accountant ensured all income and expenses are accurate to what actually happened over the month?
Though not all small business owners have to track and maintain an inventory for their business, the ones that do should conduct a monthly review. Reviewing your inventory does a few things, but mainly it helps you identify consumer trends, determine what items should be reordered or put up for sale, and keep your inventory properly stocked.
Keep an eye out for receivables that are past due. You or your accountant can separate these open invoices and send out reminders to vendors or customers who still need to pay.
The end of the month is the perfect time to review payroll and tax payments. You or your accountant can identify errors early on, remedying them before any major issues arise. As a general rule, the proper tax payments for income tax, social security, Medicare, and disability need to be reviewed at least once a month. Also, the proper withholdings should be made within each payroll period.
Reviewing your profit and loss statement, also referred to as an income statement, allows you to evaluate your small business’s actual vs. anticipated performance. Comparing your actual profit and loss with your budgets on a monthly basis just helps you understand your financial wellbeing that much better.
Now you understand just how monthly small business accounting services can have a large, positive impact on the financial understanding of your operations. Monthly performance of general ledger accounting not only helps you better forecast for the future, but breaks annual business revenue down into more comprehensive bites.
Here’s a monthly accounting to-do list for small businesses. As a small business owner, you can use the following checklist to follow along while utilizing accounting software. Or, you and your accountant can refer to this monthly checklist as they perform their general ledger accounting tasks.
4Corner Business Services is Denver’s answer to both accounting and bookkeeping services for small businesses. We offer expert professional accounting services to small and large businesses across the Denver metro area. As an English-Spanish bilingual firm, we offer accessible, accurate, and timely advice for all your business needs. Whether you're looking for accounting & bookkeeping services, organizational support, or business consulting services, 4Corner is here to help you grow.
We can provide your Denver, CO small business with all the bookkeeping and accounting services you need so you can better understand your business’s finances and maximize your profit potential. At 4Corner Business Services, we are the experts who help you understand what accounting services do small businesses need. For small business accounting tax services in Denver, CO, check out our website for more. We address all your accounting needs from general ledger accounting to other small business accounting services so you can focus on the other important aspects that come with running a small business. We can help you budget and track annual business revenue, giving you invaluable insight into how your business is currently performing and how it is projected to perform.
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