20 Basic Accounting Tasks for a Small Business

This is another level of quality assurance to make sure nothing needs correction or modification. For instance, you may want to move a certain expense to another category. Bookkeepers need to frequently report back to management, get their feedback, and work as per their instructions. They should immediately inform management or business owners when there’s something wrong with the company’s financial health. At the end of the day, bookkeepers have to go through all the journal entries, and if any entry needs modification, that should be made. For example, if you have recorded printer ink under stationary expenses, but you want to move it to consumable items, do that immediately because later on, you might forget.

The bookkeeper enters relevant data such as date, price, quantity and sales tax (if applicable). When this is done in the accounting software, the invoice is created, and a journal entry is made, debiting the cash or accounts receivable account while crediting the sales account. Again, if you use accounting software, like Bench vs QuickBooks, you might have connected functionality for expense reporting and even gathering receipts. Of course, this is only possible if payments are managed electronically. If you don’t have that set up, try to see how you can get this process automated. If not, it’s a manual job that can fall under the weekly bookkeeping tasks.

No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. A bookkeeper can expect to earn a salary in the range of $30,000-$60,000 a year in the US.

Reviewing and Updating Chart of Accounts: Maintaining Organized Financials

We recommend doing financial health inspections monthly and then quarterly. As the business stabilizes, you can do them twice a year and then yearly moving forward. Well, we’ve put together this post of 15 monthly, weekly, and daily bookkeeping tasks for you! Petty cash is essential to run day-to-day business operations smoothly. So, bookkeepers should maintain a petty cash book, write slips each time cash is taken out, enter petty cash entries into software, and reconcile it at the end of the month.

• Because the funds are accounted for in the bookkeeping, you use the data to determine growth.
• There are also specific considerations regarding taxation on employee expense reimbursements.
• This includes business expenses, invoices, donations, funding, sales, salaries, etc.
• Your business’s success depends on multiple factors, including planning, strategizing, and marketing.

The core function of a bookkeeper is to ensure that all bills are paid on time, transactions are recorded correctly, payroll runs on time and taxes are filed correctly. So if you’re looking to hire a bookkeeper, it is essential to create a bookkeeper job description that fills your recruitment funnel with ideal candidates as quickly as possible. A Bookkeeper is a service professional who helps business owners and companies keep track of the money they earn and spend. They prepare your accounts, document daily financial transactions and ensure compliance with applicable standards.

We help eCommerce businesses master their finances.

We’ve put together this guide to help you understand the basics of small business bookkeeping. This last of our short list of bookkeeping tasks is a great way to round them off. Backing up data is so crucial at every stage, but we chose monthly for a few reasons.

While there is a general overlap between the two professions, there are a few distinctions that are later discussed in this article. Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets. Then categorize your expenses into different categories, start estimating your expected revenue for the upcoming period, and allocate your expenses accordingly. Many or all of the products featured here are from our partners who compensate us.

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Remote work has expanded across nearly every field, including bookkeeping. If you find someone who is a good fit for your business needs, it doesn’t matter if they are in California while you work from New York. You’ll want to create a contract that outlines details, such as deadlines, rates and expectations so that everyone is on the same page. Expenses are all the money that is spent to run the company that is not specifically related to a product or service sold. An example of an expense account is Salaries and Wages or Selling and Administrative expenses. The chart of accounts may change over time as the business grows and changes.

Many accountants also prepare tax returns, independent audits and certified financial statements for lenders, potential buyers and investors. A bookkeeper is responsible for identifying the accounts in which transactions should be recorded. Very small businesses may choose a simple bookkeeping system that records each financial transaction in much the same manner as a checkbook. Businesses that have more complex financial transactions usually choose to use the double-entry accounting process. Another type of accounting method is the accrual-based accounting method.

Tracking your A/R, usually with an aging report, can help you avoid issues with collecting payments. QuickBooks, Wave, and FreshBooks are among the best accounting software for self-employed and freelancers. You need to be able to assess from your monthly reports if you’re scaling or if there are areas of business where you need to cut costs. We believe everyone should be able to make financial decisions with confidence. The skills needed to become a successful bookkeeper are often acquired through working in a career in the finance industry or even by balancing your personal budgets.

Processing Payroll: Calculating Employee Salaries and Taxes

If any department is running short on inventory, the bookkeeper contacts the vendor and places an order for new inventory. Moreover, in small business organizations, it is also the responsibility of bookkeepers to track and maintain inventory records. Your business’s success depends on multiple factors, including planning, strategizing, and marketing. This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business.

Review Aging Receivables and Payables

If you’re looking to convert from manual bookkeeping to digital, consider a staggered approach. Overhauling all at once can be overwhelming and discouraging, so it’s best to take it slow and make meaningful and intentional shifts. By staying up to date with your bookkeeping throughout the year, you can help alleviate some of the stress that comes with filing your taxes.

Our expert CPAs and QuickBooks ProAdvisors average 15 years of experience working with small businesses across various industries. When you think of bookkeeping, you may think it’s all just numbers and spreadsheets. how to calculate the break Bookkeeping is the meticulous art of recording all financial transactions a business makes. By doing so, you can set your business up for success and have an accurate view of how it’s performing.