Small business managers and owners make strategic decisions about allocating the business's financial resources and work time of key employees of the business between various business functional areas. It is often a difficult balancing act to properly allocate time and money towards marketing efforts, operations, recruitment and hiring personnel, and financial decision making.
Successful entrepreneurs and business managers create successful models of allocating resources to create the highest return on investment. This is often done intuitively and "going with your gut" but nonetheless, creates wealth and prosperity for the owners and stakeholders of the business.
The financial accounting segment of a business is crucial for the business's growth at any stage. In order to create a clear financial vision for a business and to avoid wasting time and money though tax compliance issues, accounting cleanups, cash flow issues, and other items, we recommend establishing a basis financial accounting plan.
A basic accounting plan should include the following items:
Accounts payable (A/P) processing: Reviewing and processing vendor invoices, recording of payments in the accounting system, and maintaining accounts payable aging reports.
Accounts receivable (A/R) processing: Processing of sales invoices and customer credits, recording these in the accounting system, and maintaining accounts receivable collection reports.
Bookkeeping procedures: Recording of transactions in the accounting system. This may include sales invoices and employee expenses, and recording taxes/provisions on various business transactions to enable the preparation and maintenance of general ledgers, journals, supplier and vendor lists, bank statements, inventories, and equipment.
Budgeting: Reviewing available financial resources and allocating towards the operation plan on a regular basis in a manner that generates the highest return on investment.
Income Tax Planning: Regularly monitoring the taxable income generated by the business and depending on the business type, assisting owners in making estimated tax payments or keeping a reserve of cash to pay their income tax obligations when they come due.
Payroll Tax Processing: If you pay employees, even as an owner-employee, you need to handle federal, state, and local payroll tax obligations on a regular basis.
Sales Tax Processing: For businesses that sell a product or provide a service that is subject to one state or more's sales tax regulations.
This is a very basic but crucial list of financial accounting items business owners and managers should ensure they include in their allocation of resources in order to maximize the efficacy of their business which will help them create the highest return on investment for their selves and their stakeholders.
Cloonan & Associates is very experienced with assisting businesses in all areas of financial accounting performance and helping businesses maximize their return on investment. Contact us if there is anyway we can help your business reach its goals.