You don't have to be an accountant to run a successful small business, but you should be familiar with the ins and outs of bookkeeping. The process of maintaining detailed financial records and accurate assessments is essential for managing cash flow. If you own a small business—or you're planning on starting one—here’s what you should know about this critical task.

What Does Bookkeeping Entail?

Bookkeeping is comprised of a number of tasks, which are completed on a daily, weekly, monthly, quarterly, and annual basis. For example, if you handle cash, it should be counted at the end of every business day. As for weekly tasks, examples include updating payroll, preparing invoices, and paying vendors. On a monthly basis, you’ll want to pursue past-due receivables and evaluate balance sheets.

Every quarter, small businesses must make estimated tax payments. And every year, they should prepare a year-end analysis, complete relevant IRS forms, and send any pending receivables to collections. 

Why Should it Be Prioritized?

Accurate bookkeeping serves a number of functions. Its primary purpose is to track all incoming and outgoing transactions, thereby providing a clear picture of the business’s health at any given time. Detailed bookkeeping also ensures compliance regarding both payroll and shareholder obligations. 

As the company grows, you can use detailed records to make cash flow projections, too. This allows you to devise and implement ambitious growth strategies. Should you ever decide to sell the company, financial statements will prove invaluable as they'll demonstrate to potential buyers that the business is, indeed, valuable. 

For help organizing and tracking your company’s bookkeeping, contact the professionals at Balanced Bookkeeping & Tax Services. Operating out of Lincoln, NE, this accounting firm has been serving small businesses throughout the metro area since 1998. With a commitment to professionalism, responsiveness, and excellence, their knowledgeable team meets only the highest standards. To learn more about their small business accounting services, visit their website. To discuss your company’s needs, call (402) 466-4272.