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4 Corners CFO

Know Your Numbers, Grow Your Business

August 17, 2022

Tasks to Keep Your Business Finances Healthy

We are often asked if there are specific tasks that should be completed on a regular cadence to keep your business finances healthy. The answer is YES! Many tasks should be completed either by you or by trusted financial professionals regularly for financial health. We are breaking them down by day, week, month, quarter, and year so you can start today! 

Daily Tasks

Record and Deposit Payments

Depending on how often your business receives payments, this may be a daily, weekly, or monthly task. Keeping a daily routine of recording and depositing any payments you have received will be beneficial if you accept daily payments. Whether the charges are in-person, cash, or bank transfer, it is not a good idea to hang onto cash. Get the money to the bank, so your accounts reflect the reality of the business finances.

business finances

Reconcile Payments

Often, payments arrive without much explanation. If you have money you are unsure where to allocate, it is essential to reconcile them for your records. This is especially important if you have many payments daily; for clean financial records, spend some time allocating them to the specific service, product, or project. 

Weekly Tasks

Timesheets and Payroll

Depending on how often you pay your employees, this may be a bi-weekly task. While you don’t need to check payroll daily, you will need to upload and check the data regularly to make the payroll run smoothly. You will need to gather and review timecard information, calculate payroll (taxes, benefits, take-home pay, etc.), and process the payments, so your employees are paid on time.

Monthly Tasks

Invoice Preparation

Paying clients keep your business afloat, so invoice preparation is critical. Be proactive with invoicing by giving your clients plenty of notice that an upcoming payment is due. Your customers should always know what they owe, and you can reduce cash flow issues by increasing the likelihood that the balances will be paid on time. Being consistent with your invoicing is good financial practice and creates financial expectations with your clients. 

Account Reconciliation

It is always a good idea to ensure that your bank account matches your accounting system. While accounting software can help with the automation of tracking practices, you want to check in periodically and ensure that your bank account matches the data in the software. This practice will allow you to identify anything that might have been overlooked during the month.

Send Outstanding Payments

Just like it is important to make sure that your clients are paying you, you also want to make sure that you are paying your vendors and service providers. Paying on time maintains good relationships with the other companies you do business with monthly. A necessary part of relationship management is ensuring you stay current with the payments you owe. 

Review Financial Reports

Don’t wait until the end of the quarter or year to look at the big picture of your business finances. Set cash flow and income goals with your CFO and review those goals and relevant financial reports every month. This allows you to keep your goals top of mind and check in on the progress you are making toward those goals. Knowing your financial situation and your plans for your business will help guide your decisions in the next month. 

Quarterly Tasks

Review Profit and Loss Reports

Just like you check your financial reports against your goals each month, you should look closely at your profit & loss statements every quarter and compare them to your annual goals. Your P&L information helps you see your overall revenue, expenses, and profit margins. You can use this knowledge to measure how things compare to what you expected. If you find that the numbers aren’t where you thought they would be, it is a great time to make adjustments so you can reach your goals. This review also serves as a quarterly financial strategy session to plan for the upcoming quarter.

Quarterly Tax Payments

Certain taxes require quarterly payments. Be sure you stay on top of these payments to avoid any penalties or massive back payments. For example, payments need to be made for quarterly payroll filings, sales tax, and estimated payments for income tax. Work with your tax preparer or CPA to make all necessary payments quarterly. 

Annual Tasks

Tax Preparation and Filing

Annual taxes are something many business owners dread! Yearly tax preparation is a big financial task, and we recommend you outsource to a professional. The process can be tedious and time-consuming, and it is important to get it right. If you have completed all the tasks listed in this article, then tax season can be easier than if you have been ignoring your numbers all year.

Year-End Equipment and Inventory Review

If your business has equipment or inventory, we recommend you take stock of everything on hand at least once a year. Ask some of the following questions: 

  • Does the number of items in real life match the number in your accounting or inventory software…has anything been lost, stolen, or damaged?
  • Does any equipment need to be replaced?
  • Are your inventory levels ready for the busy seasons of the year?
  • What products need to be retired because they do not sell? 

Full Year Financial Review

Finally, once the numbers are all prepared, take some time to review the complete financial reports. Evaluate which goals you met and where the business fell short. Even if the numbers don’t match what you were hoping for, this information can be used to improve your strategies and goals for the upcoming year. Regardless of the final numbers, being aware and operating with knowledge allows you to set new goals from a place of confidence. 

If you need some assistance with business finances and creating tasks, or you want to chat about your business financials, set up a complimentary discovery call. We would love to help you create systems that keep your business healthy and thriving. 

Filed Under: Accounting, Bookkeeping, Budgeting & Forecasting, Business Finance, Cash Flow Tagged With: Business Finance, Small Business, Taxes

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