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15 Essential Accounting Tasks for Business Owners—and When to Get Them Done

Billie Anne Grigg

Billie Anne Grigg

Billie Anne Grigg has been a bookkeeper since before the turn of the century (yes, this one). She is a QuickBooks Online ProAdvisor, LivePlan Expert Advisor, FreshBooks Certified Beancounter, and a Mastery Level Certified Profit First Professional. She is also a guide for the Profit First Professionals organization. Billie Anne started Pocket Protector Bookkeeping in 2012 to provide an excellent virtual bookkeeping and managerial accounting solution for small businesses that cannot yet justify employing a full-time, in-house bookkeeping staff.
Billie Anne Grigg
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Managing your business finances is key to your company’s success. But with accounting tasks piled high, that might not seem like the easiest thing to accomplish. Have you ever found yourself sitting at your desk, facing a huge pile of receipts and bank statements?

If you’re like many small business owners, you rush to get all your financial reports and statements in order right before the spring tax filing deadline. Or maybe you have gotten to the end of the month, quarter, or year, only to discover your expenses were much higher than you anticipated.

Business ownership is a full-time job, even without adding accounting tasks into the mix. Using accounting software to do some of these tasks for you is a great step, but even that doesn’t relieve you of all the responsibility surrounding your business’ accounting. Following is a list of 15 accounting tasks you should be doing daily, weekly, quarterly, and annually.

15 Essential Accounting Tasks for Business Owners

Here’s a look at the accounting tasks that you should be completing on a daily, weekly, monthly, quarterly, and annual basis.

Daily Accounting Tasks

1. Update your financial data

If you use accounting software, it will automatically sync up with your business bank account and credit cards, as well as with sales data from your point of sale. If you log in to your accounting software each morning, you will see updated information on what you’ve spent and revenue you’ve brought it. And you will spend mere moments a day on this accounting task.

Why do this daily? You are much more likely to remember why you made a transaction yesterday than you are if you wait a week. Trying to remember why you went to the office supply store on Monday when it’s now Friday only serves to make this task take longer, so work your bank, credit card, and sales feeds daily.

2. Deposit cash and checks

Another daily accounting task is to deposit any cash or checks that you receive. For cash deposits, you ideally should have a conveniently located bank or ATM. Most of the top banks for small businesses accept mobile check deposits, so depositing checks should only take a few moments out of your day. Doing this on a daily basis ensures that you don’t lose track of incoming revenue.

3. Reconcile payments and receipts

Reconciliation is the process of matching transactions that you’ve entered into your accounting software with your bank and credit card statements. Since transactions sync up with accounting software almost instantaneously, you don’t have to wait until you get your monthly bank or credit card statement. Accounting software will suggest category/customer matches for each transaction, making the reconciliation process easily. You just need to make sure that all transactions are properly accounted for.

4. Update inventory records

Inventory and accounting are closely related. If you run out of stock on a particular product, it will cost you to replenish it. Running out too soon or thinking you’re out of stock because an item hasn’t been accounted for yet can cost you sales and profits. The best way to have an accurate picture of your inventory is to update it daily. Whenever stock comes in, add it to your inventory count. An inventory management app can help you with this daily accounting task.

5. Back up your data

You might be wondering why this is on a list of daily accounting tasks, but backing up your hard drive it’s critically important. You never know how much valuable, irreplaceable information is on your computer until you experience a hard drive failure.

There are dozens of cloud-based, inexpensive, automated backup systems available, so this is a daily task you can put on autopilot. For example, with QuickBooks Online cloud-based accounting software, you don’t have to worry about doing back ups. Your data is securely accessible from anywhere with an internet connection.

Weekly Accounting Tasks

6. Pay vendors and suppliers

Most vendors and suppliers are likely to invoice your business on NET 30 or NET 60 terms. However, there’s good reason to pay invoices well before the deadline. Doing so might help you earn early payment discounts and boost your business credit score. Make sure you review invoices for any errors, and take advantage of your accounting software’s functionality to schedule payments ahead of time.

7. Review employee timesheets

This is a critical small business accounting task. Even if your payroll is on a biweekly or semimonthly basis, you should review your employees’ timesheets weekly. Ideally, you want to check these two days before the end of the work week. This is a way to avoid surprise overtime liabilities. Once an employee works over 40 hours in a week, even if it is unauthorized, you are on the hook for overtime pay, so take this proactive step to protect your bottom line.

8. Compare your month-to-date P&L to your budget

Even if you are careful about your spending, it’s easy to exceed your budget if you don’t track it regularly. If employees have business credit cards in their name and the authorization to use their own discretion when making purchases, expenses can get out of control even more quickly. Comparing your month-to-date profit and loss statement with your business budget on a weekly cadence will help you make wise spending decisions and avoid the shock of a lower bottom line at month-end.

9. Scan your documents and receipts

Even if you aren’t ready to embrace a completely paperless office, scanning your documents and receipts into a cloud storage system will protect your important records from degradation due to heat and time. In the event of an audit, you will be able to provide any requested backup documentation quickly and without fear the document will not be readable.

Once scanned, you can shred the paper, saving valuable office space. Not comfortable getting rid of the hard copies? Don’t waste your time by filing the paper into separate folders by vendor. Instead, file the entire scanned batch into one folder or envelope, marked with the scan date and the date range of the receipts and documents included in the folder.

A final note on this accounting task: While you, the business owner, can do the scanning yourself, this is a perfect task to delegate to a high school student or intern. If you have tween or teenage children, paying them to do your scanning for you lets them earn some money and qualifies as a deductible business expense.

Month-End Accounting Tasks

10. Review your bank and credit card statements and reconciliation reports

There are several reasons to do this month-end accounting task. If your bookkeeper or accountant reconciles your bank statements for you, this is a good check to ensure the reconciliations are being done accurately and in a timely manner.

Keep an eye open for postings to a “reconciliation discrepancy” account. Most accounting programs offer this option as a way to force an account to reconcile. If the difference is only a few cents, posting to this account isn’t a huge red flag. If, however, there are large balances posted to this account, ask your bookkeeper or accountant why they made the adjustment.

Another reason to review your statements and reconciliation reports is to detect possible fraud. Ideally, your business should segregate duties such as accounts payable, accounts receivable, taking deposits to the bank, and reconciling the bank accounts, but in reality this isn’t always possible. Having the same person perform the bank reconciliation and these other tasks could make your business susceptible to employee dishonesty. Reviewing your statements and reconciliation reports will help you detect any issues (and your team knowing you do these reviews deters anything bad from happening in the first place).

11. Review your financial statements with your bookkeeper or accountant

On a monthly basis, you should review your company’s three main financial statements—profit and loss statement (P&L), balance sheet, and cash flow statement. You can easily generate financial statements in QuickBooks or other accounting software for a monthly time period. Alternatively, you can do a screenshare video call with your bookkeeper or accountant to review your financial statements each month. This will help you identify any potential financial problems in your business before they become too difficult—or impossible—to fix. If you outsource your bookkeeping, this will also allow you to answer questions your bookkeeper might have, and vice versa.

Understanding your financial statements is key to growing a profitable business, but most small business owners don’t really understand what their financials are telling them. For this reason, reviewing your statements with your bookkeeper or accountant is one of the most important accounting tasks you can do in your business.

12. Chase down unpaid receivables

The standard term on most invoices is NET 30. To ensure prompt payment, you should send an invoice immediately after a job is done, offer incentives for customers to pay early, and give your customer a friendly reminder midway through the month.

If you still haven’t received payment within a month, it’s time to call the customer with a reminder. Make sure you’re talking to the right person in their accounts payable department, and don’t be afraid to enforce late payment fees or interest. If several weeks have passed after the deadline, you can take legal action or (more commonly) write off the invoice as a lost payment.

Quarterly Accounting Tasks

13. Compute estimated taxes, and make payments

Most small business owners must file a quarterly tax return and pay taxes on a quarterly basis. These include social security, medicare, and income taxes. You can use IRS Form 1040-ES to calculate your taxes. Just divide by four to get estimated quarterly amounts. You can then pay the taxes electronically on the IRS website. When you file your annual business tax return in April, you will pay any balance that wasn’t covered by your quarterly payments.

Annual Accounting Tasks

14. Prepare year-end financial statements

If your company follows a calendar accounting year, December is the time to prepare and analyze your end-of-year P&L statement, balance sheet, and cash flow statement. Each of these statements tells you something different about your business. The P&L tells you the net income your business earned for the year (your bottom line) and lets you see your operating expenses. The balance sheet shows your company’s mix of assets and liabilities. The cash flow statement shows when and from revenue streams cash flows into your business, as well to which customers or expenses it flows out. Together, these statements are critical to future business planning.

15. Submit your annual tax return

Your annual accounting tasks culminate in the filing of your business tax return. Tax returns are due in March or April, depending on what type of business entity you have. The form you should use for your return will vary based on your business structure. Just keep in mind that you must typically pay business taxes on a quarterly basis. The annual return is primarily for informational purposes and covers any taxes that weren’t paid quarterly.

Accounting Tasks for Small Business Owners

Check These Accounting Tasks Off Your To-Do List

Taking the time to complete these accounting tasks ensures that your bookkeeping stays up to date and that your bottom line is protected. Done on a regular basis, these tasks take mere moments. The return on your investment of time, though, is astronomical. You won’t have to spend time later looking up specific transactions, and you will avoid paying tax penalties.

Carve out some time on a daily, weekly, monthly, quarterly, and annual basis to set your business up for financial success. Also, keep in mind that a lot of these tasks become easier when you hire a professional or use accounting software.

Billie Anne Grigg

Billie Anne Grigg

Billie Anne Grigg has been a bookkeeper since before the turn of the century (yes, this one). She is a QuickBooks Online ProAdvisor, LivePlan Expert Advisor, FreshBooks Certified Beancounter, and a Mastery Level Certified Profit First Professional. She is also a guide for the Profit First Professionals organization. Billie Anne started Pocket Protector Bookkeeping in 2012 to provide an excellent virtual bookkeeping and managerial accounting solution for small businesses that cannot yet justify employing a full-time, in-house bookkeeping staff.
Billie Anne Grigg

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