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4 Accounting Tasks That Must be Done on a Weekly Basis
Correct and up-to-date financial and bookkeeping records are a must for all businesses, whether large or SMBs. These records determine the success of any business.
Some of the biggest establishments across the globe have been doomed for the reason that their accounting processes were not up-to-the-mark, disorganized, or incorrect. Even SMBs these days are prone to poor accounting procedures.
Given the fact that a SMBs are majorly dependent on the cash flow, most business owners do not know a lot about finance and accounting. They think that accounting is something, which needs to be handled only in larger establishments – the ones with more assets.
SMBs typically manage their business finances like they handle their personal finances – occasionally checking the balance in the account and paying off their bills when they have money available. What can be worst?
Some of the SMBs engage the services of a bookkeeper and not an accountant. A bookkeeper would not have the required knowledge regarding correct accounting practices and business owners blindly trust them with their finances.
Does this problem ring a bell to you? How to ensure that your business is not one of them? To begin with, you must understand the fundamentals of accounting and bookkeeping.
Listed below are the 4 tasks that you ought to be performing on a weekly basis without fail:
1. Paying your vendors
Your business requires a proper system for paying the vendors. This is important in order to keep a proper track of all your debts. It also plays a crucial role in maintaining a good repute and credit rating of your business amongst the vendors.
The terms of payment might differ from vendor to vendor, thus you cannot get away simply by paying your bills all at one time in a month. A few vendors might agree to get paid in a period of 30 days, while others demand the payment as soon as the bill is raised.
In case you pay off your debts on the 1st of each month and get a “due on receipt” invoice from the vendor on the 2nd, there are chances that the vendor might freeze your account or even cancel the contract on account of non-payment.
Nevertheless, this is an accounting process that should not take place on a daily basis, either. It often takes up a lot of time of the bookkeeper and there is no particular benefit of paying your bills on a daily basis.
It is best to pay your bills once a week and you would also observe that by doing so; your business efficiency will also increase. All your bills would be paid on time and your bookkeeper would not face a tough time having to deal with a lot of check runs.
2. Bank account reconciliation
It would be foolish of you to believe that your bank account would remain reconciled at all times without you having to take a look at it. Proper bank account reconciliation is an absolute must for all businesses as it helps them to understand the actual cash they have and then compare it with the cash they thought they had.
A lot of SMBs across the globe tend to make a typical blunder of waiting for their bank statement to arrive and then reconcile it with their account, but the problem is here is that bank statements are generated only once a month.
This implies that you approximately have 30-31 days between the reconciliations and too much can take place within this time frame. Thus, it is advised to reconcile your bank account on a weekly basis. And, in case you have time in your hand, even doing it every day is not a bad deal.
3. Customer receipts
The only thing that is worse than an unsatisfied vendor happens to be an unsatisfied customer. Nobody expects to pay a bill and then get a ‘past due’ letter a week later. To steer clear of such situations, always make it a point that the receipts from your customers are recorded and maintained in a timely manner.
This process ideally should be done every day, but in case you are short of time, weekly can work too. Irrespective of the time period you decide on, don’t forget to mark the exact date when the payment was obtained. By no means, you should mark the current date or postmark date.
Needless to say, refrain from sending any kind of email statements to your customers without posting all the receipts firstly, unless you wish to attend telephone calls or email responses from agitated customers.
4. Additional transactional entries
Payments from the vendors and receipts from the customers, in all probability, would form the majority of your business transactions; however, you are going to deal with others, as well. Transactions like interest amounts, a fee levied by bank and auto-debits are required to be recorded every week.
A lot of bookkeepers opt for recording them prior to reconciling the account to make the process as seamless as feasible. As your business develops and flourishes, you might have to develop your customized system to handle each and every facet of the accounting process, but the above-mentioned points also can work in giving you a decent start.
There is an alternate way, as well. To avoid such overhead costs on hardware and resources, you can choose to opt for outsourcing accounting services to a reliable third-party vendor. Don’t forget: Whether you are the company owner or an accountant, it should be your main goal to remain abreast on the complete financial situation of your business.
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