Day to Day Accounting Process If You Wish to Do Your Own Books

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 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. This process will make it much more effortless than manually typing anything into the system.
• Each transaction should have a Payee. If you have many 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—an automatic audit trail for your CPA or tax preparer. 😊
• While the banking transactions are in the banking area of QBO, they are not posting to your Balance Sheet or Profit and Loss Statement. Every transaction should be assigned to a category or general ledger account. Add it if you do not see a category that fits that transaction. 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.

Monthly

• 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.
• The Balance Sheet. Your bank accounts under the asset area should be the same as your bank statements (unless you have outstanding checks or other timing issues). Do you have any undeposited funds or liabilities with debit balances? Many people focus on the P&L, but the Balance Sheet is just as important, if not more. If the balance sheet is correct. 99% of your P&L will be accurate too.
• Profit and Loss Report. 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? Any spikes in any of the expense lines? Keep on top of subscriptions and cancel what you are not using.

Tax time will be a breeze if you follow these steps as I have outlined. 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, nicolea.co2000@gmail.com, 720-939-0614