Free Accounting and Bookkeeping Tasks Checklist for a Small Business

Effective accounting and bookkeeping are essential for small business owners who want to maintain financial control and grow their businesses. By consistently keeping track of income, expenses, and taxes, a business can ensure smooth operations and avoid unpleasant surprises during tax season. This checklist breaks down the essential daily, weekly, monthly, quarterly, and annual tasks that small businesses should follow to keep their accounting and bookkeeping in order. 

Why is bookkeeping important for small businesses? 

At its core, bookkeeping allows a business to track what it owes and what it is owed. It ensures that bills are paid on time, that customers make their payments promptly, and that state and federal taxes are calculated and paid correctly. In addition, maintaining an up-to-date bookkeeping system provides a clear financial picture, allowing business owners to make informed decisions about their operations. Without effective bookkeeping, a business may struggle to stay organized and avoid penalties, cash flow issues, or tax problems. 

Daily accounting tasks 

Each day, small business owners or their bookkeepers must complete tasks that involve recording and managing financial transactions. These tasks ensure that the business remains financially healthy and compliant with regulations. 

1. Deposit all payments 

Every day, businesses receive payments in various forms, such as cash, checks, and credit card transactions. Ensuring that all received payments are deposited into the business's bank account is essential to maintain accurate cash flow records and reduce the risk of lost payments. 

2. Enter and pay bills 

Incoming bills need to be entered into the accounting system as soon as they arrive. Prompt entry ensures that businesses can manage their cash flow by knowing what payments are due and avoiding late fees. 

3. Summarize cash sales 

For businesses that handle cash, daily summaries of cash receipts provide insights into the day's sales performance. This allows the business owner to track revenue and compare it with sales projections. 

4. Record expenses 

Throughout the day, businesses incur expenses that must be recorded, including purchases of materials, supplies, or services. By logging these expenses promptly, businesses avoid inaccuracies and keep their financial records current. 

Weekly accounting tasks 

At least once a week, bookkeepers should dedicate time to reviewing and reconciling the company’s financial accounts. Weekly reviews are crucial to maintaining financial accuracy and avoiding the buildup of outstanding issues. 

1. Reconcile bank accounts 

Reconciling the business’s bank accounts is a vital weekly task. This involves comparing the bank statements with internal records to ensure that all deposits and withdrawals match. Doing this regularly helps to detect and resolve discrepancies, such as bank errors or missing transactions. 

2. Monitor accounts receivable 

Review your list of outstanding invoices to ensure that customers are paying on time. Follow up with those who haven’t made payments and send reminder emails or make phone calls to ensure timely collections. 

3. Check for unpaid bills 

Weekly reviews of accounts payable help ensure that upcoming bills are paid on time. By keeping track of due dates, businesses can avoid late fees and maintain a good relationship with vendors. 

4. Conduct financial housekeeping 

Set aside time for financial housekeeping tasks, such as sending account statements to clients, updating financial records, and clearing any administrative backlogs. A weekly review helps the business stay organized and on top of its financial obligations. 

Monthly accounting tasks 

The end of the month is the perfect time for more comprehensive financial reviews. Monthly tasks include reconciling accounts, generating financial statements, and preparing for payroll. 

1. Balance the books 

At the end of every month, it’s important to review and reconcile all bank and credit card accounts. This ensures that your financial records match your bank statements and credit card transactions, reducing the risk of errors. 

2. Review credit card payments 

Check your credit card payments to ensure they have been deposited into your bank account. This step ensures that there haven’t been any processing problems or delays, ensuring accurate records of incoming revenue. 

3. Review accounts receivable 

Take a close look at your accounts receivable to identify which customers have overdue invoices. Send out reminders or follow-up communications to resolve outstanding payments and maintain healthy cash flow. 

4. Process payroll 

If your business handles payroll in-house, ensure that all employee wages, taxes, and deductions are processed and distributed accurately. For many small businesses, outsourcing payroll to a third party simplifies this complex process. 

5. Review inventory data 

Accurate inventory tracking is crucial for determining your Cost of Goods Sold (COGS) and creating financial statements. Monthly reviews ensure that inventory levels match physical stock, helping you stay prepared for tax season. 

6. Generate financial statements 

Each month, generate essential financial statements, including the profit and loss statement (P&L), balance sheet, and cash flow statement. These reports provide insights into the company’s performance and financial health. 

7. Provide profit and loss (P&L) reports 

Presenting a P&L statement at the end of each month shows business owners the revenue and expenses for the month. This snapshot helps them evaluate profitability, identify cost-saving opportunities, and plan for future growth. 

Quarterly accounting tasks 

Quarterly accounting tasks are typically more time-intensive and involve preparing financial statements, estimating taxes, and filing quarterly returns. These tasks help businesses stay compliant with federal and state regulations. 

1. Estimate and pay quarterly federal taxes 

For most businesses, estimating and paying quarterly federal taxes is a requirement. These estimated payments prevent businesses from being hit with a large tax bill at the end of the year. 

2. Pay state taxes 

Every state has different tax requirements, but businesses are often required to pay state taxes quarterly. These taxes can include sales tax, excise tax, and other state-specific levies. 

3. Prepare quarterly financial statements 

Some businesses prefer to generate financial statements quarterly instead of monthly. These reports provide an updated look at the company’s performance, profitability, and financial position, allowing for strategic decision-making. 

4. Conduct a budget review 

At the end of each quarter, it’s a good idea to review your business’s budget to ensure that actual expenses align with projections. This allows for adjustments to be made for the next quarter. 

Annual accounting tasks 

At the end of the fiscal year, businesses must complete several significant accounting tasks, including preparing tax returns and closing the books. Annual reviews are essential for finalizing financial statements and preparing for the upcoming year. 

1. Review fixed assets 

Once a year, review your business’s fixed assets. Add newly acquired assets to the books and remove assets that are no longer in use. This ensures that your financial statements reflect the current state of your business. 

2. Issue W-2s and 1099s 

The IRS requires that businesses issue W-2s to employees and 1099s to independent contractors. Completing this task ensures compliance with federal tax laws and provides workers with the documents they need to file their taxes. 

3. File tax returns 

Filing business tax returns is one of the most critical tasks of the year. Depending on the structure of your business, you may need to file federal, state, and local tax returns. Make sure to adhere to filing deadlines to avoid penalties. 

4. Year-end close 

Prepare your general ledger accounts for year-end close. This task involves adjusting entries, reconciling accounts, and ensuring that your books are accurate and complete before starting the next fiscal year. 

The Benefits of following a checklist 

Following a detailed bookkeeping and accounting checklist offers several benefits for small businesses: 

• Consistency: A regular schedule ensures that critical tasks are not overlooked, keeping your financial records accurate. 

• Organization: By following this checklist, businesses can keep financial data organized, making tax preparation easier. 

• Compliance: Completing these tasks on time helps businesses stay compliant with tax and regulatory requirements. 

• Improved cash flow: Regularly tracking receivables and payables helps maintain a healthy cash flow, which is crucial for business success. 

Conclusion 

Staying on top of your small business’s accounting and bookkeeping tasks is essential for financial success. By breaking down tasks into daily, weekly, monthly, quarterly, and annual intervals, small business owners can avoid financial headaches and make informed decisions based on accurate data. Utilizing an outsourced bookkeeping service can further streamline this process, ensuring that your financial records are managed efficiently and accurately. Following a structured checklist, whether through in-house staff or an outsourced bookkeeping service, allows you to focus on growing your business while keeping your finances in order.