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What Is Business Accounting?

March 16, 2021
Bill Kimball

accounting checklists

Track your accounts payable and have funds earmarked to pay your suppliers on time to avoid late fees and disgruntled associates. If you can extend payment dates to net 60 or net 90, all the better. Whether you make payments online or drop a check in the mail, keep copies of invoices sent and received using accounting software to really make things easier during tax time. At QuickBooks, our business accounting software is intuitive and easy to use, to ensure you can achieve these tasks with ease.

accounting checklists

Check in with employees and partners in the morning, and have them remind you of any expenses they are aware of. It’s a good idea to keep a list for the day of both incoming and outgoing payments.

Monthly Accounting Tasks

This new business checklist will give you the framework necessary to educate yourself on accounting processes for startups and small businesses. Following these steps can help you launch your business on the proper footing. You will also have accounting tasks to complete quarterly and at the end of the year. For example, you should close your books at the end of the year and pay quarterly taxes.

accounting checklists

For help determining whether your worker is an independent contractor or an employee, see our 1099 vs. W2 article. If you employ independent contractors or freelancers, check out our How to File 1099 guide. The IRS has a January 31 deadline for reporting the annual earnings of your full-time employees (W-2s) and most independent contractors . This deadline includes mailing copies of the tax forms to the people who worked for you. If your company operates in a state that requires sales tax, make sure you comply to avoid serious penalties. The U.S. Small Business Administration can help you determine your state tax obligations.

Before signing off your tax returns, review the same for accuracy unless you want to be audited by the IRS. In such cases, accounting software manifests themselves into saviors and can not only help you save time but costly errors as well. Don’t get caught off guard when it comes time to make your quarterly payroll payments. Most States require quarterly reports and payment, but check with your State and work with your accountant or payroll provider to determine your specific State and Federal requirements. Your accounting software can help you quickly retrieve payroll journals, cash requirement reports, and payroll tax returns. Once you’ve created a separate account, it’s time to purchase bookkeeping software customized for small businesses.

Review the payroll summary before payments are disbursed to avoid making corrections during the next payroll period. A payroll service provider can do all this to save you time and ensure accuracy at a reasonable cost.

The accounting checklist is also a great tool for bookkeepers. One of the most overlooked areas in most businesses is the inventory which is maintained, and therefore is an extremely important point in the accounting checklist for startups.

Review Past

This includes all current bills and invoices, even if they still need to be paid. Review all past documentation to make sure everything has been recorded. To make this process easier, we recommend Hubdoc for electronically storing all supporting documents as this keeps everything in one place. GAAP Checklist Tool, see the Client User Guide for additional guidance. The checklists are intended to assist entities in evaluating their compliance with U.S. For some business owners, there’s no need to take physical inventory. For others, getting an accurate account of your inventory is important.

  • Spreadsheets and accounting software all of a sudden become your favorite thing.
  • Pay attention to the column showing the oldest invoices; this is where you are likely to find errors or issues.
  • If you have employees and it is payday, write employee checks.
  • Log in to download your report.Log in to download your report.

Business accounting is the process of gathering and analyzing financial information on business activity, recording transactions, and producing financial statements. At O2I, we have worked with some of the largest multinational companies, as well as new startups and small businesses and provided them with high-quality finance and accounting services. The US Small Business Administration can help determine whether you need to pay sales tax or not, so if unsure, you know where to turn to. In the US, the IRS, as well as the most states, require payroll reports to be submitted to them on a quarterly basis, along with any other payments. Once again, make sure that your quarterly payroll reports are in order, and if too much to handle, always take help from a payroll service provider.

Pay Vendors On Time And Sign Your Checks Appropriately

Fortunately, your accounting software solution will likely have a line item for all 1099 vendors and contractors. In addition, Gusto will file contractor 1099s on your behalf. The first thing you should do before and after this checklist is review your profit and loss statement. It’s a good reminder to see how you’re spending your money but also if your expenses are categorized. Yes, you need to make quarterly sales tax payments as well. Taxes aren’t just an annual occurrence for small businesses.

Deliver the paychecks to employees with a consistent method. If you’re not using cloud-based accounting software that automatically backs up your data, back up your financial data manually every day. Doing so gives you peace of mind that you won’t lose your data if you have a hardware failure, file corruption or some other issue. When you receive bills, review them for errors and look at the terms. If your vendors offer early payment discounts, schedule the payments to take advantage of them.

You should pay payroll taxes on a monthly or semi-weekly schedule. You can use the IRS Publication 15 to determine your schedule. Remit tax payments to the appropriate government agency.

This is a good time to strategize and get back on course if you’ve fallen off a bit. Stay on top of sending invoices as it is helpful for customers as well as for your team. You want to send out invoices while your services are still fresh in customers’ minds. And, obviously, the sooner you send out invoices, the sooner you’ll get paid. Keeping your books up-to-date saves you from overpaying on your taxes and shows you how well your company is performing. Time-saving tips to accurately record your transactions and create reports. One tax planning strategy is to accelerate expenses you were planning to buy early in the new year.

Answering these types of questions will help you make and continue to make profitable business decisions in the future. You’re able to see things from a full circle perspective which can enlighten you as to the good or bad decisions you made. However, it is so important not to forget your vision and reflect on the ways you have or have not aligned your business with your vision.

New Business Checklist Step 4: Payroll

Use these numbers to enhance financial forecasts and communicate performance to management and investors. One of the easiest ways to stay in compliance is to open a separate bank account and credit or debit card for all business transactions. Check with your local bank to see what documents you need. You usually need to bring your articles of incorporation or organization, employer identification number , and personal identification. It’s critical to understand the two different methods of accounting and how they impact your business’s financial reporting. It’s also important to become intimately familiar with the three basic financial statements.

accounting checklists

Also, whether the payment is made by check or through an online transfer, always keep a copy of the invoices. The first step to get your books ready is to make sure that all of your business transactions are entered into Wave.

Otherwise, set payment reminders so you can pay your bills on time and avoid late fees. They boil down accounting and bookkeeping topics into quick reads. Scan through them to find the information or advice you need in nice bite-sized chunks.