Bookkeeping for small to medium-sized businesses involves recording, organizing, and managing financial transactions to maintain accurate and up-to-date financial records. At Richardson Professional Solutions we pride ourselves on executing successful bookkeeping organization and maintenance strategy.
Setting Up Accounts: The first step is to establish a database of accounts. This involves creating categories for different types of transactions such as revenue, expenses, assets, liabilities, equity, etc. Each account is assigned a unique code or number for easy reference.
Recording Transactions: Every financial transaction, whether it’s a sale, purchase, expense, or payment, needs to be recorded accurately. This is typically done using accounting software like QuickBooks, Build Books, or Wave. Transactions should be recorded in the appropriate accounts based on their purpose and classification. This is an important step in tracking profit and loss quarterly and annually and helps in preparing for Tax Season at the beginning of each fiscal year.
Invoicing & Receivables: Businesses need to create and send invoices to customers for goods or services provided. Invoices should include details such as the product or service sold, quantity, price, terms of payment, and payment due date. Monitoring accounts receivable is crucial to ensure timely payment from customers and again building a consistent strategy for comparing income and expenditures. Monitoring account receivables ensures the receipt of timely payments from customers and ensures the accuracy of accounting reports.
Paying Bills and Account Payables: Businesses also need to track and pay their bills to suppliers, vendors, and other creditors. Also, and from a certain business functionality standpoint this tracking would also include employee payroll. This involves accurately recording account payables, scheduling payments, organizing business expense receipts, if applicable, and organizing and archiving employee expense receipts such as gas or per diem. All bookkeeping tasks handled by the Richardson Professional Solutions team are set up and performed to ensure a timely transactional and professional good standing through relationships with suppliers and manufacturing partners.
Bank Reconciliation: Regular reconciliation of bank statements with the accounting records is essential to identify any discrepancies or errors. This process helps ensure all transactions are accurately recorded and that the business’ financial records align with its bank statements.
Financial Reporting: SMB (Small to Medium Sized Businesses) need to generate various financial reports to assess their financial health and make informed decisions. Common financial reports include the income statement (profit and loss statement), balance sheet, cash flow statement, and aged receivables/payables reports.
Budgeting and Forecasting: Developing budgets and forecasts helps SMBs plan and manage their finances effectively. Budgets set targets for revenue and expenses, while forecasts project future financial performance based on current trends and profitability versus loss.
Compliance & Tax Reporting: SMBs must comply with relevant accounting standards and tax regulations. This involves filing accurate tax returns, maintaining proper documentation, and staying up to date on tax law changes that may impact the business. With a major emphasis on payroll for the company’s staff as well.
Audit Preparation: While not always necessary for small businesses, maintaining organized and accurate financial records is essential for audit preparation. Having clean financial records makes the audit process smoother if the business is ever subject to an external audit.
Regular Review and Analysis: Regularly reviewing financial statements and performance metrics allows SMBs to assess their financial performance, identify areas for improvement, and make strategic decisions to achieve their business goals.
Outsourcing bookkeeping tasks to professional bookkeepers like those at Richardson Professional Solutions and using accounting software can streamline the bookkeeping process for SMBs, allowing them to focus on core business activities while ensuring their financial records are accurate and up to date.
Call Richardson Professional Services for more information on how we can help your business with their bookkeeping needs.