Bookkeeping Tasks for Small Business

Running a small business is exciting but also means juggling many responsibilities. Bookkeeping is one of them; let’s face it, it can seem scary! But don’t worry, it doesn’t have to be a monster in the closet.

20 Bookkeeping Tasks for Small Business

This post breaks down essential bookkeeping tasks into easy-to-understand steps. Bookkeeping needs a routine to be effective. But how often should you tackle those financial to-dos? The good news is, there’s no one-size-fits-all answer. The frequency of tasks depends on factors like the size of your business, the volume of transactions, and your personal preference.

If you are looking for a career as a professional bookkeeper, this list of duties and responsibilities will give you an idea of the work you might do on your own or as part of a team. It is worth checking the bookkeeper job description to see if the post suits your training.

Double Entry Bookkeeping with Accounting Software

Double-entry bookkeeping is an essential part of accounting. It records transactions in a way that allows businesses to track their finances. A bookkeeper’s job is to post and keep financial transactions up-to-date and accurate.

Bookkeeping software can help with double entry bookkeeping and reduce data entry. It ensures that businesses have accurate financial records, which is essential for making sound business decisions.

QuickBooks Accounting Software Discount

Daily, Weekly or Monthly Bookkeeping

Every small business owner needs a system to keep their basic bookkeeping records in order. Bookkeeping is the backbone of your business’s financial data. While some duties need your attention daily, others can be tackled weekly, monthly, or annually.

Here’s a rundown of the job duties for bookkeeping:

1. Dealing with Post and Emails

Make time to regularly check both post and emails for invoices, bills, payments, and important notices. This simple habit ensures timely payments, avoids late fees, and keeps your financial records organised.

2. Check Your Bank Account

Connect your bank accounts to your bookkeeping software for a real-time view of your finances. Bank feeds allow you to effortlessly track balances and transactions and reconcile accounts, making it easier to stay informed and manage your cash flow effectively. Check your accounts regularly, ideally daily or weekly, to clearly understand your financial position.

3. Reconcile Bank Account

Bank reconciliation ensures that all transactions are posted by matching the accounts with the bank statements. Reconciliation of the bank account, savings and credit card should be completed regularly.

4. Prepare and Send Sales Invoices

Send sales invoices out as soon as the job’s done or on your agreed-upon date, whether for a deposit, a monthly payment, or the final bill. The sooner your customers receive their invoices, the sooner you’ll get paid.

5. Record Customer Receipts

When a customer pays a sales invoice, record the payment against the sales invoice in the accounting records. It will ensure that you do not chase a customer for an invoice already paid.

6. Banking Cash

Customers pay by cash; they will need banking regularly, ensuring that not too much money is on the premises at any time.

7. Credit Control – Accounts Receivable Ledger

One of the essential jobs is credit control. If you do not get paid by a customer on time, it can cause cash flow problems. Credit control procedures must be implemented and checked each day if invoices require chasing for payment. If customers do not pay on time, debt collection letters or court action may be needed. Software like QuickBooks and Xero can assist with sending automatic reminders.

8. Process Supplier Invoices

When receiving a supplier invoice, record it in your accounting system and check that the details are correct. If you require authorisation from management, this is the time to obtain it. Any queries on a supplier invoice can be submitted.

9. Pay Bills to Suppliers

Paying suppliers on time is crucial to maintaining good relationships and avoiding disruptions to your business. Make sure to pay invoices promptly to prevent your credit from being cancelled. To streamline this process, establish regular payment runs, either weekly or monthly.

10. Filing of Paperwork

Keep your filing system up-to-date, whether it’s paper or digital. Many accounting software programs allow you to upload receipts, reducing the need for hard copies. Scan documents for digital storage and easy sharing.

11. Petty Cash

Petty cash covers small expenses. Track every penny in a log and replenish the fund regularly to ensure accurate records and monitor spending.

12. Complete Payroll

Payroll can be a complex area for small businesses, involving calculating wages, deductions, and taxes. Accurate and timely payroll processing is essential to keep employees happy and avoid legal issues. Consider using payroll software or outsourcing this task to a specialist to ensure compliance and streamline the process.

13. Review Cash Flow

Cash flow forecasting may be completed in either the short or long term. A business with a tight cash flow may need to review the position daily. Other companies may require long-term forecasting for either a year or more. It allows them to see if the business will be profitable and expand.

14. Prepare Financial Statements

Two key financial reports offer vital insights into your business’s finances:

  • Profit and Loss Statements (Income Statements): Shows your sales, costs, and expenses, revealing your profit or loss.
  • Balance Sheet: A snapshot of your financial health assets, liabilities, and equity at a specific time.

Use these financial reports to monitor your financial health, track progress, and make informed decisions.

Xero discount

15. Tax Payments

Staying on top of your tax obligations is crucial for any small business. Missing tax return deadlines can lead to penalties and interest charges, not to mention unnecessary stress. Mark key tax deadlines in your calendar and gather the necessary information well in advance. Consider using accounting software or seeking professional help to ensure accurate and timely tax filings.

16. Perform a Stock Take

A stocktake can be done at any time but is required at year-end. It ensures that the stock held is equal to the stock in the accounts; if there is a difference, an adjustment by the journal can be made. Stock can also change in value.

17. Journal Entries

Any adjustments to the accounts will need to be entered using journals. There can be many reasons for journals, including accruals, prepayments, underpayments, bad debt and general adjustments.

18. Cash Flow Statements

Skilled bookkeepers go beyond basic recording and delve into the story behind the numbers. They provide valuable insights by generating cash flow statements, which track the movement of money in and out of your business.

19. Excel Spreadsheets

Spreadsheets are essential tools for bookkeepers. They offer a flexible way to organise, analyse, and visualise financial data, from tracking expenses to creating budgets. A skilled bookkeeper uses spreadsheets to automate calculations, identify trends, and gain valuable insights.

Cash Book Template

20. Liaise with Accountant

One of your bookkeeper’s responsibilities is maintaining a good working relationship with the accountant. This involves providing accurate and organised records, clearly communicating your financial questions and concerns, and seeking their expertise for tasks like tax planning, financial forecasting, and business advice.

Produce Annual Accounts

It doesn’t matter if you are a limited company or self-employed as a bookkeeper; you will need a set of accounts at year-end. A limited company must submit them to Companies House, and the self-employed to HMRC. The reports should include profit and loss, a balance sheet, and perhaps a trial balance.

Bookkeeping Conclusion

Bookkeeping might seem overwhelming, but it doesn’t have to be. By understanding the key tasks and staying organised, you can take control of your business finances and set yourself up for success. Mastering these basics gives you the power to make smart decisions and grow your business. And remember, a skilled bookkeeper can be your secret weapon, bringing clarity and peace of mind to your financial journey.

To learn more about bookkeeping tasks, read our bookkeeping basics section. Or, if you want to become a professional bookkeeper, read our guide to starting a bookkeeping business. Professional bookkeepers are required to register for anti-money laundry, obtain insurance, and, if qualified, become a member in practice.

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