Does your small business conduct a quarterly bookkeeping review? If not, now is the time to start. You'll get better control over your finances, make more informed decisions, and avoid unwanted fees and problems. Here's what you might include in a quarterly review.
1. Record Transactions and Reconciliations
First, if you haven't kept up with all of your data entry, recording all transactions, and reconciling accounts, get this done at least once per quarter. This is a common problem for small businesses, and once you get behind, you tend to stay behind. Then the problems are much larger at the end of the year. A bookkeeper can help you get caught up.
2. Confirm Tax Payments
Businesses get into all sorts of trouble if their taxes aren't paid correctly and on time. So this is an area that you should give separate attention to on a quarterly basis. Once transactions have all been entered, you can prepare quarterly tax forms. In addition, reconcile and confirm payments of sales taxes, payroll taxes, road taxes, and excise taxes.
3. Analyze Financial Statements
Go over your financial statements to get a bird's-eye view of how the business is running. Cash flow statements help you see if you're keeping money coming in and going out in a timely manner. Profit and loss statements indicate how well you are or aren't making a profit. And the balance sheet gives you a snapshot of asset values, liabilities, and expenses. Compare these with other quarters and drill down into accounts for more information.
4. Look for Sales and Expense Trends
Trends are only visible over time, so you cannot get the best sense of them on a daily basis. Armed with a quarter's worth of data and more, look for valuable information on how things are going. Which products make profits? Which don't? Where are you spending more or less than before? Are you keeping up with paying bills on time? Has payroll grown? It may not always be easy to look at trends, but it's vital.
5. Make Goals for the Next Quarter
Finally, use what you find to make positive changes for the future. Where would you like to cut back costs? Which product lines have higher profit margins and should be expanded? Can you spend more on marketing or cut back on travel expenses? Would you like to keep up with data entry better? Discuss these goals and how to implement them as a team.
Where to Start
Want to improve your business through a quarterly bookkeeping review? Start by meeting with a local bookkeeper, such as Peggy's Tax & Accounting, LLC.
Share31 March 2022
Accounting is the absolute most important element of running a business. If you mess up the bookkeeping even the slightest bit, the entire business could be in trouble. I know how costly a small bookkeeping error can be. About three years ago, I made a seemingly small mistake in the financial records for my business and the next year when I filed my taxes, things were very bad for me. What would have required a small tax payment had suddenly turned into a big tax bill and quite a headache. Since then, I have worked with an accountant and things have been better.