What an owner/manager should know:
Daily
- Cash on hand.
- Bank balance (keep business and personal funds separate).
- Daily summary of sales and cash receipts.
- Errors corrected in recording collections on accounts.
- Record of all monies paid out, by cash or check.
Weekly
- Accounts receivable (take action on slow payers).
- Accounts payable (take advantage of discounts).
- Payroll (records should include name and address of employee, Social
Security number, number of exemptions, date ending the pay period, hours
worked, rate of pay, total wages, deductions, net pay, check number).
- Taxes and reports to state and federal government (sales, withholding,
Social Security).
Monthly
- That all journal entries are classified according to appropriate account
numbers (these should be generally accepted and standardized for both
income and expense) and posted to general ledger.
- That a profit and loss statement for the month is available within a
reasonable time, usually 10 to 15 days following the close of the month.
This shows the income for the business for the month, the expense incurred
in obtaining the income, and the profit or loss resulting. From this, take
action to eliminate future loss (adjust mark-up? reduce overhead expense?
pilferage? incorrect tax reporting? failure to take advantage of cash
discounts?).
- That a balance sheet accompanies the profit and loss statement. This
shows assets (what the business has), liabilities (what the business owes),
and the investment of the owner.
- The bank statement is reconciles. (That is, the owner's books are in
agreement with the bank's record of the cash balance).
- The petty cash account is in balance. (The actual cash in the petty cash
box plus the total of the paid out slips that have not been charged to
expense should total the amount set aside as petty cash.
- That all federal tax deposits, withheld income and FICA taxes (form
501) and state taxes are made.
- That accounts receivable are dated, i.e., 30, 60, 90 days, etc., past
due. (Work all bad and slow accounts.)
- That inventory control is worked to remove dead stock and order new
stock. (What moves slowly? Reduce. What moves quickly? Increase.)
Reprint courtesy of the United States Small Business Administration
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