Well-managed accounting helps every organization accurately assess its cash flow and operations. As you juggle with day-to-day management, you shouldn’t overlook the importance of monthly accounting. Monthly balance sheets educate you about the financial gaps in your books if any. They will be your savior if push comes to shove.
We understand that accounting can seem like a tedious task, but it’s essential, irrespective of your organization’s size. Therefore, we give you a low-down on the six accounting tips that every organization should keep in mind for smooth functioning.
Close attention to receivables
Being on top of all transactions and regularly updating books is easier said than done, especially when you’re managing several orders and clients all at once. There is never enough time. It creates discrepancies during tax payments, as your receivables report won’t match with the revenue received. Therefore, to avoid high taxes and debts, make it a point to always check off payment tasks as soon as you receive payment.
Maintain monthly statements
A monthly profit or loss statement will allow you to track the company’s cash flow and compare your monthly performance. These statements show expenses and revenues every month, which you can then compare with your performance through the previous financial year.
Review your inventory
You should always do a monthly inventory assessment to determine the products you need to order and the items you can mark for clearance. It will give you clarity on the products you need to restock and help you better understand sales.
Payroll and tax payment review
Unchecked monthly payroll often leads to errors. A monthly payroll summary will ensure that you avoid expensive mistakes and meet tax requirements. Reviewing all the income tax, medical care, and social security payments is a healthy practice.
Comparing actual profit/loss
Once done with the monthly inspection of inventory and business records, review a profit/loss statement for each month and compare it with last year. It will help you visualize your quarterly or annual budget. Comparing the numbers will help determine month-wise growth.
Comparing month-end balance sheets
The last step is to compare your monthly balance sheet with the current month and look for fluctuating factors. This comparison is the key to refining your upcoming business strategy and improving the financial future.
About Hoshi CPA LLC
We are proud to offer monthly accounting services to business owners, executives, and independent professionals in Tigard, Oregon. Hoshi CPA, LLC is a professional accountant in Portland, Oregon. Our proactive approach, experience, and expertise allow us to provide you with long-term tax plans that lower your tax liabilities. We also provide a range of other financial services, including tax compliance, tax planning, tax resolution, and CFO services. If you have questions or want to know more about tax services, you can call us at (503) 388-6580 or reach out via our online contact form.
