Financial Status Checklist

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Keeping your financial records up to date won’t be a problem if you do what is necessary on a regular basis. Though particular accounting needs may vary somewhat, the following checklist will help you understand the most common tasks required to maintain accurate accounting records.

Daily:

1. Total all cash on hand.
2. Record income. Enter a summary of sales and cash receipts in an income ledger.
3. Record all payments made by cash or check.
4. Enter deposits in your business checkbook to keep the balance current.
5. Record inventory, adding any new items received.

Weekly:

1. Review accounts receivable, and take action to collect from slow payers.
2. Review accounts payable, remembering to take advantage of discounts.
3. Prepare payroll. (Records should include name and address of employee, Social Security number, number of exemptions, date ending the pay period, hours worked, rate of pay, total wages, deductions, net pay and check number.)
4. Deduct items sold from inventory, adjusting records to reflect the week’s sales.

Monthly:

1. Balance checkbook. Reconcile your checking account records to your bank statements to ensure that both sets of records are in agreement.
2. Total all ledgers. Compute monthly totals for sales, expenses and payroll.
3. Make tax deposits. Report and remit withheld employee income taxes and FICA taxes. Also file and remit any federal or state income taxes due.
4. Age accounts receivable. Update your unpaid accounts, listing them by length of time on the books, i.e., 30, 60 or 90 days. Use this list to discover which accounts require extra collection attention.
5. Review inventory. Check inventory levels to see which items aren’t moving so you can replace them with new stock.
6. Reconcile petty cash. Make sure the actual cash, plus the total of the paid-out receipts for expenses from petty cash, are equal to the starting balance. Replenish if necessary.

Quarterly:

1. File estimated tax returns. File federal and state estimated income taxes.
2. Remit sales taxes. If required, fill out a state sales tax report and send it in along with a check for the amount of sales tax you’ve collected. You may be required to remit sales taxes monthly or annually instead of quarterly, depending on the amounts involved.
3. Prepare income statement. This will reflect the sales, expenses and profit for that quarter and for the year to date. Many larger businesses generate this report (as well as the balance sheet and cash flow statement below) monthly as well as quarterly.
4. Prepare balance sheet. This will indicate the financial position of the business at the end of the quarter.
5. Prepare cash flow statement. This will reflect the cash activity and ending position for the quarter.

Annually:

1. Total all ledgers. Compute yearly totals for sales, expenses and payroll.
2. Prepare income statement. This will reflect the sales, expenses and profit for the year.
3. Prepare balance sheet. This will indicate the financial position of the business at the end of the year.
4. Prepare cash flow statement. This will indicate the cash activity and ending position of the business at the end of the year.
5. Send out 1099 forms. Complete and mail a 1099 form (Statement for Recipients of Miscellaneous Income) to each independent contractor who earned more than $600 from you in the previous year.
6. Send out W-2 forms. Complete and mail a W-2 form to each employee who worked for you in the previous year.
7. Assemble tax papers. Pull together all the documentation you’re going to need for filing your income taxes.
8. Meet with your accountant. Turn over your tax documentation and set up a time to discuss your financial condition and tax strategy for the coming year.
9. Set up new books. Prepare for the coming year by setting up your ledgers.