The Single Best Accounting Tip for Small Business Success

accounting tasks

Accountants are required to meet state-specific educational and testing requirements and are certified by national professional associations. The accountant may work in a large company’s accounting department or an external accounting firm. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

accounting tasks

Step 7. Create financial statements

Employees and independent contractors are classified differently and give your business different tax deductions. Another common way to manage your expenses is by separating operating expenses from selling, general, and administrative (SG&A) expenses. The cost of goods sold (COGS) or cost of sales (COS) is the cost of producing your product or delivering your service. Financial data should be presented based on factual information, not speculation.

You’re all set!

While it’s true that working with financial data is a substantial part of the job, accounting is a critical business function that involves much more problem solving than you may think. Prepare balance sheets, profit and loss statements, and other financial reports. Accountant duties and responsibilities also include analyzing trends, costs, revenues, financial commitments, and obligations incurred to predict future revenues and expenses.

What Is the Accounting Cycle?

Also, if your staff sells out of an item, reordering may be delayed if your system isn’t set up to allow negative inventory counts. Referring to accountant job descriptions for resume development is a smart move to get your creative juices flowing. By reviewing the job descriptions, you can assess and make a list of what skills and experience you have that align with them.

accounting tasks

Accounting software can work with your accountant

  1. Professionals in this field need to be able to use advanced accounting software and other computer-based tools to work effectively.
  2. You’ll be expected to analyze information, keeping track of the story your money tells and providing guidance on what to do next.
  3. Key accounts that affect your cash flows include accounts receivable, inventory management, and debt payments.
  4. Business accounting might seem like a daunting mountain to climb, but it’s a journey well worth it.
  5. FreshBooks offers cloud-based accounting software that makes it easy for businesses and accountants to collaborate remotely or in person.

Certified public accountants are legally and ethically responsible to be honest and trustworthy, and to avoid negligence in their duties. CPAs have real influence over their clients, which means their judgment and work can affect not just an individual but an entire company—including its employees, its board, and its investors. There are 672,,587 certified public accountants in the U.S., according to the National Association of State Boards of Accountancy. The most common accounting methods used in practice include accrual accounting, which records transactions when they occur rather than when cash exchanges hands. Other common accounting methods include specific inventory valuation methods like FIFO (first-in-first-out) or LIFO (last-in-first-out).

Record and categorize expenses.

No business can operate without sufficient cash inflows each month, and many firms do a poor job of forecasting expected cash flows. Having separate individuals responsible for different accounting duties can improve your company’s efficiency. Keeping things up to date, including a chart of accounts, can be time-consuming. Accounting software is a great tool to streamline your accounting methods and do more work in less time. Accounting practices are a set of rules, procedures, and standards that govern the recording and reporting of financial transactions.

Because of the simplified manner of accounting, the cash method is often used by small businesses or entities that are not required to use the accrual method of accounting. Instead of recording a transaction when it occurs, the cash method stipulates a transaction should be recorded only when cash has been exchanged. Some accounting software is considered better for small businesses such as QuickBooks, Quicken, FreshBooks, Xero, or Sage 50.

Below the general job description summary, like the example above, you’ll typically see a list of responsibilities, requirements, and necessary skills, as outlined in this section and the next two. Accounting candidates must be familiar with standard concepts, practices, and procedures within the [field of focus]. Astute at relying on experience and judgment to plan and accomplish goals. Reports organization’s finances to management and offers suggestions about resource utilization, tax strategies, and assumptions underlying budget forecasts. The IRS has a January 31 deadline for reporting the annual earnings of your full-time employees (W-2s) and most independent contractors (1099s).

You can do this in a journal, or you can use accounting software to streamline the process. Since accountants create, maintain, and reference financial documents on a daily basis, is accumulated depreciation a current asset they need to understand all aspects of the most common financial statements. An accountant is a professional who is responsible for keeping and interpreting financial records.

Business owners often hire bookkeepers to enter customer sales transactions, inventory purchases, and business expenses into ‌their accounting software. Using the services of a bookkeeper can free up your time for more important tasks. Tax accounting ensures companies are tax compliant and focus on company taxes. Financial accounting focuses on preparing financial statements and tracking financial transactions. Cost accounting manages company spending by focusing on cost records and reports.

accounting tasks

This deadline includes mailing copies of the tax forms to the people who worked for you. Review your current inventory to determine the value of items not sold. Any write-down of inventory translates to a deduction on your year-end taxes. If you do not write down unsellable inventory, you are overstating your inventory balance and paying additional taxes that you don’t owe. Review your year-to-date P&L to see if you owe any estimated taxes for that quarter. In addition to identifying any errors, adjusting entries may be needed for revenue and expense matching when using accrual accounting.

Implementing accounting automation can allow accountants to streamline their workflows and become more effective. With these emerging technologies, labor-intensive tasks like tax preparation, payroll, and audits can be automated to reduce the amount of time and resources needed to move forward. The good news is that you can easily avoid the last-minute mountain of work with solid accounting habits. We’ll explain the essential accounting tasks to include on your daily, weekly and monthly to-do lists so nothing slips through the cracks. Review the payroll summary before payments are disbursed to avoid making corrections during the next payroll period. A payroll service provider can do all this to save you time and ensure accuracy at a reasonable cost.

Even if your company has just one staff member, and especially if your business has multiple employees, accounting software is becoming a must-have for every business owner. The best accounting software can help you crunch the numbers, track the transactions, and balance the books. If you’re a solo entrepreneur, professional services provider, or freelancer (like me), you might have simpler business finances, but still want to save time on tax prep and invoicing. You can choose a lower-cost “light” version of accounting software that gives you just what you need, without all the advanced features. The best accounting software tools have a wide range of features and different recommended plans based on your number of employees.

For example, adjusting entries for depreciation expenses or generating reports for business owners. Since most of the invoice data for repeat customers stays the same, using technology for automation can reduce the processing time. Invoice automation, like QuickBooks offers, can set up recurring invoices for clients who place the same orders each month.

Last Updated on June 26, 2024 by Bruce