Are you doing everything in your power to ensure your company grows? Do you pay attention to market trends, analyze competitors' behavior, and monitor how your industry is changing? While all those exercises make good business sense, there is one thing you may not be paying attention to that could seriously derail your company. If your bookkeeping house isn't in order, your efforts to grow your business could all be for naught. Savvy business owners understand the importance of accurate bookkeeping and ensure they pay close attention to their company's financials. If you too want to become a knowledgeable entrepreneur, following are five bookkeeping tasks you should attend to each week.
Paying attention to client invoices is absolutely critical if you want to run a cash-positive business. You need to understand which clients have been invoiced, whether their payments have been received on time, and whether they have an outstanding balance. If you offer 30/60/90-day payment terms, it is imperative you monitor which clients have past-due accounts. By attending to your client invoices each week, you will be able to understand which clients you should use caution working with and which clients are an asset to your business.
Even if you are a solo-entrepreneur, payroll is a bookkeeping task you should monitor on a weekly basis. Understand how payroll expenditures are affecting your business, and which areas of your company could use extra manpower. When you monitor payroll on a consistent basis, you begin to see which payroll expenses lead to increased sales and which ones offer a low return-on-investment.
Supplier Payment Reconciliation
Just as you need to pay attention to client billings, you also need to stay on top of your payments to suppliers. Failing to pay your invoices on time can seriously affect your business' credit score and reputation. If suppliers know you are consistently late with your payments, they may reduce the amount of product you are allowed to purchase or limit their services to your company. Even if you don't pay your bills each week, track business expenses to see how your current expenditures are influencing your cash flow status.
Bank Account Review
While many businesses no longer use paper checks to pay bills, reconciling/reviewing your bank account is still crucial. You may not need to track which checks have cleared, but you should still be checking to see how many cash withdrawals you have made on your account and which automatic payments have come out of your bank account. Reviewing your bank account on a weekly basis is critical if you have more than one person with access to your business bank account.
Analyzing marketing efforts each week is a move savvy business owners make. Understanding which marketing campaigns are working and which ones aren't driving sales allows you to tweak your strategy as necessary. Review everything from your social media marketing efforts to your advertising expenditures. Reviewing your marketing ROI is also a good time to analyze what your competitors are doing to grow their businesses. Even though it might not seem like a bookkeeping activity, paying attention to your marketing return on investment can have a significant influence on your incoming revenue stream.
If you make the effort to perform these basic bookkeeping steps on a weekly basis, you will always understand exactly how your company is performing. You won't be caught off-guard by events you should have caught and you might even uncover opportunities to accelerate growth for your company. Will you be increasing your efforts to perform basic bookkeeping exercises on a consistent basis?