Having a process to run your business matters. Without a clear process, you won’t be able to deliver a high quality service. The accounting and financial side of your business is the same.
In today’s episode, Bernard Roesch will share a simple accounting routine that your Professional Services business can follow.
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Daily Accounting Workflow For Services Business
Each day as you’re working on client work, there are few key things you need to do. First, track your time on client work as you are working. You can do this directly within QuickBooks integrated tools or within a separate time tracking system such as Toggl or Harvest. There are a lot of time tracking softwares available. You will be able to use this time tracking data in the later step of the process below.
Another thing you need to do on a daily basis is take in incoming accounting-related postal mail and email. For example, log any incoming bills within QuickBooks along with the due date. Doing this daily will make the rest of your accounting process streamlined.
Weekly Accounting Routine For Services Business
If you have kept up on your daily accounting routine, the weekly process is quite simple. First, review the prior week’s timesheets to ensure that they are complete and entered into QuickBooks. This helps you keep track of clients that owe you money for billable time. You might also send out invoices on a weekly basis to clients. Though, most service businesses do this less frequent—for example, monthly.
However, you should still review accounts receivable on a weekly basis to see who owes you money and possibly send accounts receivable statement reminders to clients that are at risk of becoming overdue. Doing this process weekly will ensure that you are collecting revenue from your clients.
Monthly Accounting Routine For Services Business
On a monthly basis you should ensure all timesheet are complete and invoiced clients if you have not invoiced them already. You should also process Accounts Payable bills which you have been entering into QuickBooks. However, Accounts Payable may be something you do every two weeks rather than only monthly.
You should also update your bookkeeping so that you can run Financial Statements and produce a profit and loss to gauge the health of your business. Finally, you should reconcile your bank account against your books so that you close your bookkeeping records against the month.
Quarterly and Annual Accounting Routine For Services Business
Your quarterly accounting routine will vary depending on what specific reports you review for the long term health of your business. However, reviewing these broader trends is important to understand the financials of your business and make strategic decisions. You should also file payroll reports and other regulatory filings at least quarterly to ensure you do not fall behind.
Annually you’ll do a similar process as quarterly but it will be higher level from a reporting perspective. Also, you need to ensure your tax filings are ready which usually means providing your bookkeeping records to your accountant for filing.
Need Help With this Process?
If you need help configuring an accounting routine for your services business, contact Bernard today. Bernard has helped many complex businesses simplify their accounting and he can do the same for you.
You can also visit MissionBusinessPodcast.com for more insights that Bernard has been sharing with us in the previous episodes.