Tasks Every Small Business Owner Should Be Doing – Part 2

Dorota Haskins, Chartered Professional Accountant |

Winnipeg Chartered Professional Accountant

In the first part of this four-part series on bookkeeping tasks for small business owners, I shared the fundamental daily and weekly tasks to tackle.

In this blog post, I will share tasks that you should strive to complete a monthly basis.

6 Monthly Tasks

1) Reconciliations

Balance bank statements to recorded transactions. Each month ensure that no entries have been missed and that your cash balances are in line with bank records. Reconciliations make is easier to identify errors and make corrections in a timely manner.

2) Review Aged Receivables

Just as you review what invoices are due to vendors each week, you need to ensure that your customers are paying you on time. Send out reminder notices to delinquent customers/clients. This account is very important at year-end when you need to decide which customer/client accounts need to be sent to collections and which ones need to be written off.

3) Inventory Status

If you sell inventory, set aside time each month to check your inventory levels. Ensure re-order points are in line with how quickly products are selling. This may also be a good time to discount slow-moving inventory or write-off aged stock. Checking inventory regularly also helps identify inventory control issues should they arise.

4) Payroll Taxes

While payroll is completed on a regular and recurring schedule, remittance of payroll tax is dependant on the type of remitter you are (established by the CRA). Before you submit payment, ensure you take the time to review payroll disbursements made to avoid having to make corrections during the next remittance period and paying penalties on the errors made. If you are a new small employer, remit payroll taxes quarterly, unless otherwise directed by the CRA.

5) Review your P&L as compared to Budget

Your Profit & Loss (P&L)  statement (aka Income Statement) is one of, if not, the most important report you will refer to regularly. Your P&L tells you how much you earned and how much you spent. Comparing your P&L to you budget will highlight where you may be spending more than anticipated or not bringing in the anticipated income. It allows you to take corrective action to make the necessary changes. If you haven’t prepared a budget, you can also compare the current month P&L to the same month of the previous year and identify variances. 

6) Review Balance Sheet as compared to prior period

Comparing Balance Sheet values at any given point in time helps to identify how you are managing assets and liabilities. The key items to look into include accounts receivable, inventory, accounts payable. Are the balances higher, lower, the same? For example, higher accounts receivable may indicate that you made more sales or that customers aren’t paying on time.

If after reading some of this you think you’ve just read a foreign language, then it may be time to sit down with an accountant and discuss what help you may need and how often you may need it. Don’t put aside things you don’t understand, as they may be critical to getting your business to the next level. Accountants are professionally trained to help you with more than just bookkeeping.

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