Day to Day Accounting Process If You Wish to Do Your Own Books
So, you wanna do your own bookkeeping – that’s fine. You will need to make sure you carve out 5-10 mins a day or 30 mins to an hour every week. The more you stay on top of your accounting, the better. These instructions are based on QuickBooks Online (QBO) and cash basis accounting.
Daily or Weekly:
- First – download or “update” your banking transactions into QBO daily or weekly. Accounting starts with cash in and cash out. Have all your business bank and credit card accounts linked to QBO. I will make it so much more effortless than manually typing anything into the system.
- Each transaction should have a Payee. If you have lots of networking events and appts with meals involved, add a vendor called “Restaurants.” You do not need to add every coffee shop in town to QBO.
- Upload your receipts to QBO EVERY DAY. It is easy to do this on the app. Write on the receipt who you had lunch with and why then take a picture—automatic audit trail for your CPA or tax preparer. 😊
- Every transaction should be posted to a category or general ledger account. While the banking transactions are in the banking area of QBO, they are not posting to your Balance Sheet or Profit and Loss Statement. If you do not see a category that fits that transaction – add it. Details never hurt anyone.
- If you have payroll, you need to process it timely or set up auto-pay if your employees are on salary.
- Log into your bank’s website at month-end and download your bank statements. Certain banks are now downloading copies of the reports right into QBO.
- Reconcile your bank, credit card, and loan accounts. This process is where most of the problems will fall out.
- Review your accounts receivable (A/R) and accounts payable (A/P) reports. Follow up on any A/R that is overdue. I recommend a short turnaround time on A/R. I invoice my clients as Net 10. Then review your A/P report. Keep your bills current, so you do not ruin your business credit.
- Profit and Loss Report is next. How did you do this month? Compare the numbers to last month, last quarter, or last year. Do you see any trends or issues? Are you spending too much at Starbucks? Keep on top of subscriptions and cancel what you are not using.
- Lastly, the Balance Sheet. Your bank accounts under the asset area should be the same amount as your bank statements (unless you have outstanding checks or other timing issues). Do you have any undeposited funds or liabilities with debit balances?
If you follow these steps as I have outlined, tax time will be a breeze. I promise.
Are you looking for an affordable Denver Bookkeeper? I love working for small service-based businesses. I work solely on QuickBooks Online, remotely from home in Highlands Ranch, Colorado.
Nicole Anderson, Excellent Bookkeeping Services, LLC, firstname.lastname@example.org, 720-939-0614