Most tasks, or chores if you will, can be completed at month end by hand, by using software like QuickBook’s, or by the using a simple excel spreadsheet to keep track of everything you need.   Everyone is different and calculating this stuff can be done many different ways so it’s about finding what works best for you.  Personally, I keep paper copies and e-copies of everything from bank and credit card statements, receipts from vendors for purchases, and bill payment receipts and information.

Objective:  allocate items into their “accounts” to keep a running number.   This is done by adding the prior months numbers to a statement, indefinitely.  Record keeping is extremely important here.  If you’re like most folks you will want to put off your “bookkeeping” and budgeting for as long as possible.  It will be way less of a headache if you have a least kept the data easily accessible to construct the necessary information.   I, myself, have had to “reconstruct” financial statements from years before and learned that banks only keep so many years’ statements online  –  YOU WILL ALWAYS NEED THE BANK STATEMENTS AND CANNOT ACCURATELY RECONCILE ACCOUNTS WITHOUT THEM!

Producing the following financial statements helps outside people evaluate your situation, but also enables the insiders of the organization (or household) to make the best decisions.  Additionally, a budget should be prepared for both one’s personal home life and business or work life.

The Profit and Loss statement is used to show a snapshot of the business’ gross income and net income at any given date.  It also shows the amount of funds allocated to every account which can help one to evaluate what the true necessary costs are or what they should be going forward.

The Balance Sheet shows the the snapshot of the owners Assets, Liabilities and Owners Equity at any given date.

Ex:  Telephone expense is paid through the bank and is on the statement. Allocate the telephone paid to “Telephone Expense” so there is  a running calculation for month end and for the whole year (or any given date).

Daily Tasks/Weekly Tasks

1. Enter business transactions into the general ledger to create a permanent financial history of your business.
2. Invoice your customers.
3. Make cash deposits.
4. Run Daily/weekly Cash Flow.
5. Process accounts payable and receivable.
6. Back up data.

End of month

1. Reconcile the bank statement to ensure every transaction is accounted for and it allocated to the proper account.
2. Financial Statements: Once the reconciliation is complete then you can print the Profit and loss statement, the balance sheet, and the statement of cash flows.
3. Review: this helps ensure that there are no data entry errors and also aids in business planning for the future.

Quarterly tasks

1.  Think Taxes: Payroll, Income, real estate and property tax

Additional Income Tax Effects

If you’re a sole proprietor (SCH C) or independent contractor (SCH C) or the sole member of an S Corp (1120S) you will use the Profit and Loss Statement to list your income and expenses on one of those forms.  That will give you your taxable income and/or self-employment tax.

DUE DATES:

May:  Form 941, form 4070

June: Form 4070, Form 1040-ES

July:  Form 4070, form 941

August: Form 941, form 4070

September:  Form 4070, form 1040-ES

October:  Form 941

November: Form 941 , form 4070

December: Form W-4, form 4070