Accounting is a fundamental aspect of every business. But with all the responsibilities faced by small business owners, certain aspects, like small business bank reconciliation, might be put off or ignored.
A Small Business Bank Account
A small business bank account is specifically geared toward business owners. Having a business bank account enhances the credibility of your business. It is essential for loan and credit applications that will help you grow your business. It facilitates organized bookkeeping. It provides heightened financial stability. It can be used to empower your employees, so you don’t have to do all the banking on your own, thus freeing up time to run and grow your business. It contributes to a stronger business credit rating. It lessens tax problems. And business bank accounts come with business-focused features. To keep your finances in check, it is critical to conduct a small business bank reconciliation each month.
Accounting and Bookkeeping Tasks for Small Businesses
There are critical daily, weekly, monthly, quarterly, and annual accounting tasks that need to be conducted. Too many for a business owner to do on a DIY basis. That is why it can be very beneficial to hire a professional accounting company to support you. Here are these critical tasks:
- Daily: Deposit all payments. Enter and pay bills. Summarize cash and credit sales for the day.
- Weekly: Make sure the numbers all add up and there is enough cash available to cover expenses. Check what you owe and who hasn’t paid you so follow up can take place. Lay out the bills that are due and develop a schedule to pay them. Reconcile invoices with purchase orders and confirm receipt of goods before payment.
- Monthly: At the top of the list of monthly bookkeeping tasks is a small business bank reconciliation. Review your credit card statement and make sure that all charges and payments are properly recorded. Review accounts payable to resolve outstanding invoices and send out reminders for payments owed. Process payroll (this may be needed bi-weekly.) Review inventory data. Generate financial statements.
- Quarterly: Compile quarterly financial statements. Calculate and pay quarterly federal taxes and any necessary state taxes.
- Annually: Review fixed assets. Prepare and issue W-2s to employees. File tax returns. Prepare for year-end close.
Why You Can’t Ignore Small Business Bank Reconciliation
Small business bank reconciliation can’t be put off or ignored. It must be done monthly to be totally sure that bank statements accurately reflect funds incoming and outgoing in the account. It is critical for cash flow management, accuracy in financial reporting, fraud detection, and compliance with regulatory requirements.
Accounting Best Practices
First, establish internal controls. Second, diligently manage your accounts payable and accounts receivable. Third, keep a thorough record of all your business expenses. Fourth, optimize your chart of accounts. Fifth, reconcile bank statements each month. Sixth, evaluate your financial data monthly. Seventh, plan for taxes throughout the year. Eighth, keep clean and thorough records. Ninth, get professional accounting and bookkeeping assistance.
Seek Professional Accounting Assistance
Contact Orcutt & Company, based in Milford, OH. We deliver comprehensive financial management for small business owners and individuals, providing strategic solutions that best address client needs and aspirations. Our comprehensive accounting services keep you organized and give you the data you need to make prudent business decisions, including bookkeeping, payroll, and tax.
