5 Accounting Tasks You Should Do Every Week
I’ve been where you are - scrambling at the end of the year to gather bank statements and receipts, categorizing a year’s worth of transactions, and not realizing my business profit until that final line was calculated on my tax return. That was my first year of business as a wedding invitation designer, and it was the defining moment that showed me that accounting systems aren’t just for big businesses. They’re for anyone who wants to run a profitable business.
All you need is 20 minutes a week to cultivate a new practice in your business.
But, why weekly?
Well, managing your business finances requires consistency. Weekly check-ins put you in touch with your money more often and ensure you have an accurate picture of your profit and cash flow for the coming week. The bite-sized efforts can help you stay on top of organization and set better goals, which ultimately moves your business toward maximizing profitability, instead of accepting the feast and famine cycle of many creatives.
So, where should you begin?
Your weekly focus areas should be Records, Receipts, and Reports.
Records are all of the transactions from the week - transfers into your bank account for sales through your payment processor (Stripe, Square, etc.), automatic payments to your vendors and other purchases, and any cash receipts or payments. If you’re using a credit card or PayPal, those transactions are captured here also. Using an accounting software makes it really easy to have all of your records imported automatically. All that’s left for you to do is categorize the transactions according to your chart of accounts.
Receipts are necessary to corroborate your purchases. They provide the detail about whether a particular purchase is an allowable business deduction. Chances are you’ll have both digital and paper receipts. Scanning those paper receipts and downloading the digital ones ensures that you have adequate support for all of your business expenses. Save all of your receipts in a folder together by month, and you’re all set.
Now, organizing receipts is a full topic by itself. We’ll postpone it for now and just focus on getting these receipts in a secure place and not just sitting in your inbox.
Reporting is the final step in your weekly process. Run your profit and loss statements for the week and month. The profit and loss statement for the week shows your financial performance within just a week’s time and measures the impact of your effort and hard work on your bottom line. Weekly and monthly reporting and comparisons create smaller, more manageable goals when compared against the larger goals we make for annual profit. While monthly reporting is a great representation of profitability, as many transaction cycles are completed within a month’s time, it really helps reduce the overwhelm by breaking these goals down.
That’s it! These three simple steps are tried and true methods that I use for myself and clients to stay on top of my finances and maximize profitability.
I’d love to hear if you plan to implement them in your business!