The Small Business Accounting Checklist [Infographic]

Engaging an independent accountant is one of the smartest investments you can make as a growing business—not only to stay on top of your finances, but to transform all of those crunched numbers into advice you can actually use. Turning over your finances to a pro can help ensure the accuracy of your books, the timeliness of your taxes, and it can provide valuable insight into the health, growth, and future of your business.

If you’re considering delagating your accounting, you might be wondering where to start. What information should you provide them with so they can be most valuable? What information and insights should they provide you with so you’re getting the most from their expertise?

It will all depend, but the following year-round checklists are a good place to start. They’ll cover both the things you’ll want to stay on top of and pass on to your accountant, and the deliverables you may want to request from your accountant.

Remember: Accounting Should Be Year-Round

When it comes to finances, the key is not waiting until the last minute. Although year-end is typically a great time to sit down with your accountant and get those insights that will help with future planning and big decisions, Dan Steiner, CEO of Richmond, Va-based Steiner Business Solutions recommends you “keep an ongoing dialogue with your accountant throughout the year to maximize the value of the relationship. The more time you spend focusing on the financial side of your business, the more successful you will be.”

Before we dive into the checklists, here are some important reminders:

1. Create files for filing receipts. This is crucial to help you stay organized so you’re not trying to do it during tax crunch time, or paying your accountant or bookkeeper to do it. Create a system and stick to it to save time and money in the long run. Depending on what kinds of transactions you typically have, these files could be organized by “Payroll,” “Vendors,” “Deposits,” or “Expenses.”
2. Invest in accounting software. This is a no-brainer for making everything easier, from recording transactions to creating invoices.
3. Find the right accountant for you. Every business is different; get help writing a job post that will attract the right accountant for you.

The Daily Checklist

Aside from looking at a daily snapshot of your account and filing receipts, most daily bookkeeping items can be tackled on a weekly basis—it’s more a matter of setting aside the time when you can.

• Review your cash status. Know where you stand on a regular basis. Weighing what you have against what you expect to happen in the coming week.
• Open your mail! Stay on top of payments received and posting of expenses. If you delay or miss an IRS notice, you risk major fines.
• Organize receipts. Then, file them in the appropriate file you’ve created for each. If you use accounting software, you can easily scan receipts, record transactions, and create invoices there, where your accountant can access them.
• Record transactions.
  • What’s coming in: Any payments received, whether they’re cash, credit card, or check. Be sure to verify deposits and record all forms of income.
  • What’s going out: Any payments made, whether they’re payroll or vendor expenses.

The Weekly Checklist

Your weekly to-do items are all about staying on top of what’s coming in and going out, and taking care of administrative things like sending invoices and paying bills.

• Pay bills
• Send out invoices
• Review cashflow
  • Review unpaid bills (Accounts Payable). Upcoming expenses to be aware of.
  • Review unpaid invoices (Accounts Receivable). Upcoming payments to your business to be aware of.
• If you manage a cash drawer or petty cash account, post transactions so expenses are recorded and cash is counted.

The Monthly Checklist

• Balance checkbook and credit card statements. Double-check that all entries are posted accurately (something a bookkeeper or accountant can help with, too) and your balance agrees with the ending balance on your bank statement.
• Review overdue items. If anyone still owes you money, send out notices of overdue invoices.
• Inventory reviews, if applicable
  • Track the best sellers to ensure there’s enough stock
  • Look at low stock items and plan reorders
  • Look at high stock items and plan markdowns
• Review YOY reports. Take a look at this year’s month vs. this month last year (if applicable) to see how you’re doing.
  • Review profit and loss statements, and compare against existing budget. Identify and investigate large variances. This is important in seeing how your business is performing
  • Review Balance Sheet. Most small business owners (and even many bookkeepers and accountants) ignore this important financial statement.
• Make a backup of your accounting software. You don’t want to lose all that hard work you just did!

Monthly Deliverables from Your Accountant

Each month, you might ask your accountant for a few things, including

• Copy of bank reconciliation
• Profit & Loss, Balance Sheet and Cash Flow reports
• Budget vs Actual report of income and expenses
• Review of tax payments for payroll, income, and sales tax

The Quarterly Checklist

• File quarterly estimated tax payments
• Review and file quarterly payroll reports and submit quarterly payroll payments

Quarterly Accountant Deliverables

• Estimate and file your quarterly income tax payments
• Compute and pay your sales tax liability so you avoid any penalties (this can be done monthly as well; your State will determine your filing frequency)
• Prepare profit & loss statement. This will ideally help you improve your margins
• Create and review payroll reports. An accountant can help with IRS-required payroll payments.

Year-End Checklist

• Fill out IRS W-2 and 1099 forms. This is when you’ll report the annual earnings of your contractors and employees.
• Take a physical inventory of raw materials and finished goods/merchandise on hand. Compare counts to what’s recorded in your accounting system and make adjustments if necessary.
• Update any changes in your unemployment insurance rate from State taxing authority for the upcoming year

Year-end Accountant Deliverables

• Provide and review full-year financial reports
• Categorize any major purchases as fixed assets for depreciation calculation
• Review and submit tax returns
• Provide list of adjusting journal entries proposed or recorded in accounting system by accountant

At the end of the day, what you’ll want to provide your accountant and get in return will depend both on the duration and frequency of the engagement, and your goals for engaging a pro. Are you looking for data to backup important decisions, or more general guidance to avoid risks, fees, and other unpleasant surprises?

While these lists are just to give you an idea of what you should be doing, the key is to make your accounting a year-round focus.

Read more: How Do I Choose the Right Accountant?