Accounting heath routines for SMEs: You need 5 mins a month for this
Starting your business you’ll need to handle with accounting tasks and responsibilities that come along with owning a company. And while accounting is not really exciting activity, it’s crucial to build up a system here that will support ‘the back’ of your business.
Starting a small business you don’t usually hire a bookkeeper to delegate these tasks at once. Most often your small enterprise is required to file an annual report only, which is basically once a year.
This guide will help you to keep the books properly and come to this date without paper issues and burning deadlines. 5 minutes a month, that’s it!
Accounting Routine Checklist
Step 1. Record all financial activities
Each of your incomes and expenses should be recorded. When you receive or send money, there must be some document containing financial information about the transaction.
The common type of document to record a transaction between a company and a customer is an invoice. Given the alternatives such as checks, receipts, and bills, an invoice is presented in the law everywhere, so that is optimal.
Invoice management can be easily organized by an invoice generator. Just make sure to check that the form contains all the necessary information. Pay special attention to numbers (have to be subsequent) and dates of an invoice. It is crucial for tracking payments and managing overdue invoices.
Step 2. Keep all the records
It obviously needs to be kept till the next reporting period. But also, in most countries, a company should keep all the records for 7 years.
When you use an invoicing management service, the task of storage gets easier, because the generated documents are usually stored in your profile (if only you don’t use the free trial). And if you have a free trial generator or do invoices manually, then you have to create a folder to keep them.
The same goes for incoming invoices. Since they are usually sent via email, you can create a special mailbox to receive invoices from your providers and contractors in one place. It’s also helpful to save copies of the documents in some cloud storage folder. You can set up the files to be deployed from the mailbox to Google Drive automatically via this application.
Step 3. Analyze financial transactions
The accounting process starts with analyzing financial transactions. Simply, enter your bank account profile and check whether your invoices meet your incoming and outgoing payments.
Every transaction should find a source document as the foundation for recording. If some documents are missing, you contact your counterparty if required to fill the gap without breaking a chronological order.
Step 4. Approach to the annual report
Then business transactions go to the journals like sales journals, etc., and then to a general ledger. You get the balance sheet, check if the total debits equal total credits, you prepare a business financial statement - that which is called an accounting job.
You can use accounting software or seek for one-time service of a professional accountant for it. Anyway, it will be a piece of cake to prepare an annual report from organized invoices that meet all the transactions.
The accounting heath is similar to any other health routine you do. Imagine, you go to a dentist and it comes as a regular check-up. No extra charge for treatments, and no hours spent searching and fixing long-standing problems.
How to Reduce Time for Accounting Hygiene
Hygiene in general is about building necessary routines into your life.
Provided a service? - Issue an invoice
Got an invoice? - Save it in a particular folder
Received the money? - Сheck the numbers
It’s not difficult to manage, at least until you don’t have a busy invoicing workflow (10+ invoices per month). But still, many businessmen neglect accounting hygiene, because it takes time to log in to your invoice generator, then - to your mobile bank account, to upload incoming documents, and so on.
Enty Control Panel is a solution to save your time and energy. Use an embedded invoicing service, connect your bank account with Control Panel, and upload here all the external documents and they will be automatically sent to a certified accountant who will file an annual report on your behalf.
0 overdue invoices, 0 docs lost, 0 fines, 5 minutes of your time a month, and +500 to your management capacity rate with a single subscription!
