4 CPA Accounting Services Vital to a Business’ Survival
Businesses need to keep strong bookkeeping and financial accounting records to be successful. Some of the largest businesses have failed in the past because their accounting practices were disorganized or, in some cases, deceptive. Small businesses may be especially vulnerable to poor accounting practices.
However, this hands-off approach can quickly lead to trouble. A business must carefully track its income and expenses to generate enough revenue to cover its costs. This information makes it easier to make informed decisions about where to move resources or how to price products and services. The four CPA accounting services every business must accomplish daily, weekly, and monthly are:
Bank Account Reconciliation
It’s important to reconcile your accounts frequently to catch mistakes and discrepancies early. If you wait until your monthly bank statement, you could miss out on important information for weeks. Try to reconcile at least once weekly, preferably daily, if you can.
Vendors need to be paid promptly to maintain a good relationship as well as a good credit history. You should have a system for vendor payments in place to keep track of what you owe and to establish good credit with your vendors.
Paying your bills on time is important to maintain good relationships with your vendors. Some vendors may give you a grace period, but others require payment as soon as you receive the invoice. If you’re ever in doubt, it’s best to contact the vendor directly to ask about their payment terms.
While this is important, this shouldn’t be done daily. Once a week is often the most efficient option, as it lets your bookkeeper stay focused and promptly pay all bills.
One of the most important CPA accounting services you must exercise regularly is billing your customers. They are, after all, the lifeblood of your business. Without customers, you can’t pay salaries, bills, and loans!
The worst thing for a business is an unhappy customer. No one likes to be charged for something, then receive a “past due” notice quickly. To prevent this, make sure your customer’s receipts are recorded promptly. Once daily is ideal, but once weekly should be good enough.
Make sure to mark the date the payment was received rather than the postmark or current date. This will ensure clarity and satisfaction from customers. Always post receipts before mailing statements unless you want to be inundated with phone calls.
Various Transaction Entries
The main transactions that you will need to record are vendor payments and customer receipts. However, you may need to record other types of transactions every week. Other transaction entries don’t fit into the other categories, such as auto-debits, interest payments, and bank fees.
Record these transactions before you do a bank reconciliation, making the process as smooth as possible.
The accounting cycle records classifies, and summarizes financial transactions to prepare financial statements. The cycle begins with recording transactions and ends with creating financial statements. Always establish a system to ensure your company survives while creating deeper relationships with vendors and customers.
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