Bookkeeping and accounting checklist for outstaffing companies
Accounting and bookkeeping are not as urgent as, say, finding a technical cofounder or finding your next client. But that doesn’t mean it’s not foundational to the health of your business. Without accounting, how would you figure out your cash runway or budget for another salary?
If you’re the founder of an outstaffing business, this article will guide you through everything you need to know about bookkeeping and accounting.
Bookkeeping vs accounting. What’s the difference?
Both are numbers-related, but bookkeeping and accounting are not quite the same things. Bookkeeping is the process of recording all financial transactions—mainly income and expenses, whereas accounting is the process of interpreting your financial records – from making sure you pay the right amount in taxes to making strategic business decisions based on your business’s numbers.
Both bookkeeping and accounting are vital to every business’s success. Are sales up? Are you making an acceptable mark up on your developers? Will you have enough money next month to cover payroll? Is cash flow increasing or decreasing? The only way to know for sure is to start bookkeeping.
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Why do you need a bookkeeping checklist?
There are a number of reasons why having a bookkeeping checklist is a must for your business, including:
- A checklist will make sure nothing falls through the cracks. There are a lot of accounting tasks you need to perform to keep your business running smoothly—daily tasks, weekly tasks, monthly tasks, quarterly tasks, and annual tasks. It’s a lot to keep track of! Having a checklist helps ensure that no tasks fall through the cracks—and you successfully complete all the necessary bookkeeping to-do’s for your business.
- A checklist can be helpful if you want to pass the bookkeeping responsibility onto someone else. At some point, you might want to pass your bookkeeping responsibilities onto someone else (for example, if you hire a controller or outsource your financial tasks to a bookkeeper or an accounting professional that offers bookkeeping services). Having a bookkeeping checklist makes it easy to train and onboard someone to take over your business bookkeeping—and gives them a concrete list of all the new tasks they’ll be responsible for.
Important Bookkeeping Tasks Checklist
Here’s a bookkeeper-recommended checklist for keeping precise books:
Daily bookkeeping tasks?
- Review your cash position. You always want to have a handle on your business’ cash flow; you want to know how much cash is coming in, how much cash is going out, and how much cash you have on hand.
- Record and categorise your financial transactions. Enter all financial transactions into your accounting software or spreadsheet. Was that payment to a director for a dividend or salary or a reimbursement of expenses? These are categorised differently in your books, so record the category while transactions are fresh in your mind.
- File or digitise receipts. We recommend filing (or digitising) your receipts and your supplier invoices weekly. Otherwise, you’ll lose them and might not be able to prove certain expense deductions if you get inspected.
Weekly bookkeeping tasks?
- Review and reconcile your business bank accounts with your records. The sooner you spot any inconsistencies on your business bank statement (for example, an unexpected charge), the faster you can resolve the issue—which is why you should plan to review and reconcile your accounts on a weekly basis.
- Review and pay suppliers, employees and other bills. Every week, make sure to review your open invoices, check deadlines, and pay any vendors as necessary.
- Send sales invoices. Different clients will have different invoicing terms—some will be invoiced on completion of project, some at different stages of the project and some at the end of each month. Make sure you review your work and invoice immediately within the terms. Also make sure to include payment terms so your clients know when their payments are due.
- Run payroll and pay employees (this may be bi-weekly)
Monthly bookkeeping tasks?
- Prepare and review your financial statements. You’ll want a Profit or Loss Statement, Balance Sheet, Budget and Cashflow Forecast as a minimum to give you a sense of your financial performance for the month, how your performance compares to prior months/prior years, and any areas where you need to improve.
- Follow up on past-due invoices. At the end of the month, review your accounts receivable. If you have outstanding, past due invoices, you’ll want to follow up on payment at least once a month (more often if the invoice is seriously past due).
- Submit and pay monthly tax returns and compliance reports, for example VAT and payroll (this may be quarterly)
Quarterly bookkeeping tasks?
- Evaluate your quarterly financial statements. While you want to always have a handle on your business financials, taking a deeper look at your performance once per quarter can help you get a big picture view on the financial health of your business and help identify seasonal variances.
Annual bookkeeping tasks?
- Prepare final accounts and annual tax forms (or send your books to your external accountant for preparation).
Keeping good records means that your life will be easier when it comes to quarterly and annual taxes for your business. And last but not least, with confident knowledge of your books, you’ll be armed to make good financial decisions on behalf of your business.