At the end of each month it is wise to go through a checklist to check up on your company’s financial condition. Developing a month-end accounting checklist makes it simpler to analyze your company’s profitability and progress on a regular basis. The checklist gives you a logical process to follow and relieves some of the complexities of properly accounting for your business.
As a business owner or manager one of your primary jobs is to monitor the progress of your company financially; hence, the importance of compiling a monthly checklist. Accounting is the process of keeping track of a company’s revenues, costs, assets, liabilities and cash flow. Many businesses hire accountants or bookkeepers to take care of these details. If you decide to do so on your own, you need a business budgeting program that keeps track of your business finances and generates financial statements when needed.
Sales Summary and Inventory
One of the top items to add to your monthly business accounting checklist is a summary of sales received for the period. You should also review any other income sources for the business, such as interest income from investments. If you carry an inventory it is also important to update the inventory value each month to account for all withdrawals (sales) and additions (purchases).
Review Business Expenses
It is also important to review your business expenditures each month as a part of your accounting checklist. After looking at your expenditures, you may notice a problematic trend in spending patterns. Check on payroll expenditures for the month as well, including payroll taxes. If you see discrepancies, you must make adjustments to ensure that your checkbook, statements and all financial accounts are in balance.
The final item on your monthly accounting checklist is to run business reports and produce statements regarding your company’s financial condition. That includes balance sheets, profit and loss statements, accounts receivable and accounts payable reports. Producing accounting reports allows you to review your company’s financial status at a glance and also meet with employees or business partners to discuss required changes.