Establishing Accounting Systems
While venturing into the new world of small business ownership, it’s important for you to gain a general understanding in regards to your business’ accounting systems and recordkeeping, as these need to be implemented for proper control, reporting, and overall business management.
And – even though your business may be considered a “small business”, it is critical for the basic accounting and financial reporting systems used by large corporations to be in place. As such, to assist you in starting out in the process, we have created a “What You Need To Know” checklist that provides you with an overview of the reports and systems you will need.
Remember, too – there are a variety of inexpensive accounting software packages already available to you – designed with the small business world in mind, so have no fear!
Now, as you go through the checklist noted below, consider what type of accounting software products may be most applicable to your business – based on both your business’ market and the features being offered within the software.
What You Need To Know Checklist
Your Daily “Need to Knows”
– Cash on hand
– Business’ bank balance
– Summary of sales & cash receipts
– Correction of accounting errors (if any)
– Record of all monies paid out by cash or check
Your Weekly “Need to Knows”
– Accounts receivable / Accounts payable
– Payroll records (including employee names & address, employee SSNs, number of exemptions for each employee, employee pay period end date(s), total wages for each employee, deductions for each employee, employee net pay, and check number(s) for each employee)
– Taxes & reports for the state and federal governments
Your Monthly “Need to Knows”
– All journal entries – classified by subject
– Profit & loss statement, within 10 days following the close of the month
– Balance sheet – showing what the business has (assets), what the business owes (liabilities, and the owner’s investment (owner’s equity)
– Cash flow statement – showing all sources of cash received and how the money was spent
– Bank statement reconciliation
– Balance petty cash account (actual cash in the Petty Cash Box plus the total of the paid-out slips that have not been charged to expense)
– All federal tax deposits, withheld income, FICA taxes & state taxes
– Accounts receivable, aged (30, 60, 90 days past due)
– Inventory control
Your Recordkeeping “Need to Knows”
– Complete information on all employees
– Bank deposits, canceled checks, & bank statements
– Financial statements
– Tax returns
– Invoices, billing, sales receipts, etc.
– Business agreements, loan papers
– Licenses, permits
– Insurance policies
– Inventory records
Connect with us to learn more about our thoughts on what you NEED to know – when venturing into the world of small business ownership; we’re here to help!
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