Next in our “Monday Money with Danetha Doe” guest series, Danetha covers weekly bookkeeping tasks that every small business owner should stick to. Read on…
For most small business owners, bookkeeping isn't much fun. But do you know what's worse than having to do a few bookkeeping tasks here and there? Having to do a lot of bookkeeping tasks because you've fallen behind, procrastinated, or otherwise simply ignored them. That's when things can really snowball. To prevent that, small business owners need to stay on top of their bookkeeping weekly—and that happens by sticking to these simple, weekly bookkeeping tasks...
It's Not Real Until It's on Your Calendar
It's easy to forget to do something you never really wanted to do in the first place—especially if there's no reminder mechanism in place. That's why you need to put a weekly recurring appointment on your calendar reminding you to tackle your bookkeeping tasks. Consider 30 minutes on Monday morning before the week gets out of control. Or if you're more of a historical person, Friday afternoon might work. Also, if you are working with a bookkeeper or accountant, ask that he or she check in with you about reconciliation each week. This could be a quick email or call to make sure everything is up to date. Plus, if there are questions about transactions, that's a perfect opportunity to address: it's much easier to remember a purchase from within the last five days as opposed to the last 30 or 90.
Weekly Bookkeeping Tasks
So you've got a date on your calendar—now what are you supposed to do during that time? Here are five key bookkeeping tasks to tackle every week...
- Reconcile the week's transactions. Every expense needs to be properly categorized in your accounting system. (Hint: Kashoo makes this really easy! Learn more about bank reconciliation.) So for example, say you pay $70 payment to Comcast for internet service. That expense needs to be properly categorized (i.e. "Office" or "Services" or "Communcations" or whatever you want to call it). The only rule is that you have to be consistent! It doesn't matter what you call the accounts as long as you use the same account for the same transaction each time.
- Review outstanding invoices. A look at your outstanding invoices tells you who owes you what. In Kashoo (and all quality accounting software) this report is called Aged Accounts Receivable. (Learn to run your Aged Accounts Receivable report—and other reports!—in Kashoo.)
- Review what you owe. As important as it is to review outstanding invoices, it's also critical to get a clear picture of your outstanding bills. This is known as your Aged Accounts Payable report. (Learn how to run Aged Accounts Payable in Kashoo.) Hopefully you're up to date but if you're not, your weekly bookkeeping tasks appointment is a great time to either make or schedule payments.
- Review the bottom line. Translation: run your P&L report. Doing so will show you your revenues, expenses and what's left over (aka profit!). Running a P&L for the week might not tell you a whole lot so take this time to run your P&L for the month, quarter and year-to-date. Assuming you have financial goals in place, running these reports is a great measuring stick.
- Set an intention for the week. Having run these weekly bookkeeping tasks and reports, ask yourself what you need to do in the coming week to maintain your target goals. Do you need to increase reveneues by a certain percentage? Do you need to add a new client? Do you need to reduce expenses? Think about what you want to accomplish financially and write it down in a place where you'll see it every day for the next seven days.
These simple weekly bookkeeping tasks can make a huge difference in your business. Once you get a date on the calendar, tweet it to us and let us know what day of the week you tackle your weekly bookkeeping tasks.
Danetha Doe is a financial growth consultant for small businesses, specializing in beauty and fashion. She works with clients to improve their cash flow and profit margins, so they can expand and achieve financial success. An accomplished speaker and writer, she has been featured on Huffington Post Live with Suze Orman, Mind Body Green, YFS Magazines, and other media for her business accomplishments and expertise in cloud accounting. Visit her site danethadoe.com for free business strategy advice and to learn more about her affordable services.