20 Basic Accounting Tasks

Accounting and Bookkeeping Tasks for a Small Business

Daily Accounting Tasks

Each and every day, the bookkeeper needs to complete tasks associated with recording transactions.

1. Deposit all payments. Deposit all cash and check payments received from customers in the
business’s checking account. Enter all credit card transactions to initiate the transfer of funds from
the customer. Doing this daily gives the company an up-to-date picture of its available cash.

2. Enter and pay bills. Check all incoming invoices and enter them into the accounting system. Keep
all receipts and other relevant documents for tax purposes and for reference in case there are errors
when balancing the books. The IRS recommends paying all business expenses by check, noting on
the deposit slip the source of the deposit and keeping copies of all slips.

3. Summarize cash sales for the day. A daily summary of cash receipts is helpful because it gives
the business owner an idea of how much money it took in that day. It can help the company
understand its current cash position.

Weekly Accounting Tasks

At least once a week, the bookkeeper needs to make sure all the numbers add up and there is enough
cash to cover expenses.

4. Reconcile banks accounts. Compare deposits listed on the bank statement with deposits shown in
the accounting system. Integrating a bank feed simplifies this process by providing a digital link
between the bank account and the accounting software and imports bank transactions daily. This
means the bookkeeper isn’t forced to manually download the bank statement and import it. The
business can define the matching rules in the system for reconciliation, which simplifies the process.
Don’t have the same person who handles the cash handle the bank reconciliation. If there is a high
cash volume, reconcile daily.

5. Check what you owe and who hasn’t paid you. Identify customers who haven’t paid invoices on
time and follow up by email and phone. If accounts receivable (AR) are completed manually, the
IRS recommends setting up an “aging” column in the books to organize open invoices based on the
number of days a bill is past due. Accounting software can create these reports and update them in
real time.

6. Look for unpaid bills. Determine what bills are due next and lay out a plan for paying them. Much
like with AR, a company can set up an accounts payable (AP) aging report in its account system to
track money owed and due dates. Employees should reconcile invoices with purchase orders and
 confirm receipt of goods before payment (i.e., three-way match). Make sure to have different people
cut and sign the checks to prevent fraud.

7. Financial housekeeping. Every week, the business should set aside time for miscellaneous
bookkeeping tasks such as emailing clients account statements.

Monthly Accounting Tasks

With that bookkeeping work completed, it’s time to think about more involved tasks around month-end.

8. Balance the books. The National Federation of Independent Businesses (NFIB) suggests
reviewing and reconciling all bank and credit card accounts should be at the top of a business
owner’s list of tasks at the end of the month. It ensures all incoming revenue and outgoing expenses
have been tracked and recorded properly and that the business isn’t overspending. Make sure the
bank statement, checkbook and general ledger all reflect the same numbers. Verify how much
money is in the account, make sure that the checkbook and books reflect all bank charges and the
correct balance in the checking account and correct any errors.

9. Review credit card payments. Make sure credit card payments have been deposited in the bank
account to verify there have not been any processing problems that kept money out of your hands.

10. Review accounts receivable to resolve outstanding invoices. Identify which customers haven’t
paid by the due date and send out reminders and overdue invoices to delinquent customers. Many
companies will also call customers for an update at this point.

11. Process and review payroll. Many businesses outsource payroll processes because of the
complexity of managing payroll taxes. Payroll processing includes payroll tax withholding, reporting
and depositing income tax, and other tax-related payments. There are two deposit schedules for
taxes, monthly and semi-weekly, and business must figure out which schedule they are required to
use each year. Companies should look at Publication 15 for Forms 941, 944 and 945,
or Publication 51 for Form 943. Not making these payments could lead to a failure-to-deposit
penalty of up to 15%.

12. Review inventory data. Accurate inventory numbers on are required to determine cost of goods
sold (COGS), an important figure when creating the income statement for companies in many
industries. Analyzing inventory data also helps you identify excess stock, determine products to
promote or reduce in price and those that need to be written off.

13. Generate financial statements. Once you track all these numbers, you can generate the monthly
income statement, balance sheet and cash flow statement. Compare actuals with budgeted
expenses. Compare your month-end balance sheet with the prior month. Look at which numbers
are changing and why — is it a result of slow-paying customers or increasing expenses? Are sales
projections reflecting results?
 14. Provide a profit and loss (P&L) statement. Show revenue and expenses and report those
numbers to business leaders on a P&L statement. These numbers show the company’s current
financial position and are the basis for forecasting future revenues and expenses.

Quarterly Accounting Tasks

Once a quarter, the bookkeepers (hopefully with a little help from either an accountant on staff or a
consultant) must figure out taxes and may also put together quarterly financial statements.

15. Estimate and pay quarterly federal taxes. C corporations and individuals, including sole
proprietors, partners, and S corporation shareholders, generally have to make estimated tax
payments if they expect to owe taxes of $1,000 or more when they file their return.

16. Pay state taxes. Pay all necessary state taxes — which are different in every state but can include
sales tax, excise taxes and more. Businesses will also be taxed at the local level and need to pay
property taxes.

Annual Accounting Tasks

Once a year, bookkeepers have to complete more time-intensive tasks related to taxes and year-end close.

17. Review fixed assets. At least once a year, companies should take a close look at their fixed assets
to make sure more recently acquired assets are on the books and those no longer being used are
removed. Any companies that follow GAAP must also assess the value of their intangible assets,
including goodwill.

18. Prepare and issue W-2s to employees and 1099s for contractors. The IRS says employers
must complete and file these two tax forms, either electronically or by mail. The W-2 form, or Wage
and Tax Statement, shows the wages paid and taxes withheld for the year. For contactors, the 1099
summarizes income contractors received from your company and provides important information for
tax purposes.

19. File tax returns. The IRS has detailed information on how and when to file taxes and what types of
taxes are required depending on the structure of the business. Most small businesses use a tax
accountant during tax season to make sure all their documents are accurate and filed properly.

20. Prepare for year-end close. Prepare the general ledger accounts for financial statement
presentation and to start the next accounting period. Income statement accounts must be zeroed
out in preparation of the next accounting period, and the balances are carried over to the balance
sheet.