Keep Your Business on Track with Our Mid-Year Accounting Checklist!

COVID-19 brought unprecedented hardships and circumstances that greatly affected many businesses throughout the country. With all of this added distraction from the pandemic, many CEOs and business owners are not sure how well their business is doing. If you fall into this category, you are not alone! It is easy to put off and overlook certain business tasks, especially when it comes to your books. This is why we have created a Mid-Year Review Checklist to help you take back control of your business and its accounting/books.

A great to help your business move forward is to take a moment to look back and review the progress of your business so far. This is a way to see where you are at according to your business plan for the year. On track? Ahead of schedule? Behind? In order to accurately review your business’s progress, your books first must be in order and accurate.

Review Your Salary & Wages Report

Each pay period, your payroll needs to balance with the payroll expense account in your ledger. The payroll reconciliation process helps you keep accurate accounting records, which are necessary for tax filing and measuring financial health. You check that the transactions in your books equal the payroll register. You record the following kinds of payroll transactions in the ledger: salary and wage expenses, employer liabilities, and employee liabilities (withholdings and deductions). You need to make sure you recorded all payroll accounting transactions accurately in your books. Expenses and liabilities need to be debited and credited correctly.

Review Checks Written

Any checks that you have issued that are older than 90 days need to be canceled or reissued. If not this can cause accounting problems. If you write a check and the money never leaves your account, you may develop the false belief you can spend those funds, but the money still belongs to the payee. If the payee finally deposits the check after months of delay, you risk overdrawing your account and bouncing the check. To remedy these situations quickly, be proactive with outstanding checks. After all, you still owe the money, and you’ll have to pay it sooner or later. Businesses must track outstanding items to avoid breaking unclaimed property laws.

Reconcile Bank & Credit Card Statements

Most businesses have to sign a lot of checks, receive numerous receipts from their customers and make thousands of bank deposits on a regular basis. At the same time, it is not uncommon for some of those financial transactions to accumulate unchecked.It is important to reconcile each transaction in your bank or credit card statement with your accounting system’s ledger and log or adjust any missing or incorrect transaction. If left unchecked, your business account may become out of balance.

Review Your Budget

Comparing your budget to what you have spent every month or so to make sure that you are on track allows you to keep moving forward towards specific business goals. You should compare your budget to your actual spending at least monthly, when you’re reviewing and analyzing your main three financial statements: balance sheet, cash flow, and income statement or profit and loss. If you are over budget on certain items, you will want to address these and make adjustments as soon as possible. The three basic budget categories are operating expenses, capital budget, and cash budget.

Review All Open Invoices in Accounts Receivable

It is important to review your Accounts Receivable Aging Report. This report will list which invoices that are overdue for payment. Review all open invoices which are 90+ days overdue to see if they need to be written off, credited or to bring on an outside collections company to handle the unpaid invoices. Older receivables can signify a weak collection process and impact your cash flow. Accounts receivable aging reports allow you to monitor your unpaid invoices and contact late-paying customers. This can help identify clients that are constantly late in paying invoices, it could be a sign of bad credit risk to the business. You can test payment terms with your clients and make changes.

Review All Open Invoices in Accounts Payable

Accounts payable aging reports gives you an overview of what your business owes for supplies, inventory, and services. A quick glance at this report reveals the identities of your creditors, how much money is owed to each creditor, and how long that money has been owed. Accounts payable aging reports provide a highly effective way for a business to monitor its expenses. It can be especially handy when it comes to managing a tight cash flow. Review any open invoices in your accounts payable that are over 90+ overdue to ensure that a possible payments has not been logged or whether the invoice needs to be voided.

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Located in Orange County, Bookkeeping Enterprises is one of the region’s most trusted companies. Working with Bookkeeping Enterprises means receiving personal, professional and precise service. For years, we have served clients according to these guiding principles, establishing a reputation for careful, reliable and judicious service with companies throughout the region.

Our services are available for businesses in any industry, as well as individuals. We offer daily, weekly and monthly services that can be customized based on your exact needs. No matter the type of service you need, you’ll work with bookkeepers who are professional, courteous and experienced.

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