In the ever-changing world of business, it’s important to maintain strong accounting practices because you have more accurate knowledge of your organization’s progress. Ensuring that your accounting records are up-to-date and correct is key to strong accounting.
In this article, we discuss five accounting tasks to prioritize every three months. Completing them quarterly will keep your (financial) ship sailing smoothly.
Reconcile Financial Statements
Quarterly reconciliation involves a thorough examination of your financial statements to ensure that all transactions have been recorded correctly. You or your accounting team should compare the balances on your bank statements with those in your accounting records. Discrepancies may arise due to timing differences or errors in recording.
Also, this is the time to determine possible bad debts, those receivables that may not be paid due to customer default or financial instability. It’s crucial to review customer creditworthiness periodically and adjust your financial statements when necessary.
By identifying and rectifying discrepancies and bad debts on a quarterly basis, you get a current, accurate view of your business’s financial position.
Review Depreciation and Amortization
Depreciation and amortization are accounting methods used to allocate the cost of long-term assets over their useful life. Depreciation applies to physical assets like equipment and machinery, while amortization is used for intangible assets like patents or copyrights.
Quarterly, you should recalculate and adjust these values to reflect the current worth of your assets. That way, your financial statements show a realistic portrayal of your company’s net worth.
Revisit Tax Provisions and Estimated Payments
Staying on top of tax provisions and making estimated tax payments help to avoid costly penalties and to maintain financial stability. It’s important to calculate and set aside funds to cover your anticipated income tax liabilities. You’re then prepared to pay your taxes without a major disruption to normal operations. Proper tax planning also allows you to optimize your cash flow and allocate resources efficiently.
Determine Inventory Value
Properly valuing your inventory is essential for accurate financial reporting. Each quarter you should assess the worth of your existing inventory based on factors like market conditions and demand. This helps ensure that your balance sheet reflects the true value of your inventory. Plus, adjusting inventory quarterly enables you to make better decisions about purchasing, pricing, and sales strategies.
Review the Budget and Make Adjustments
Budget reviews are essential for adapting to the changing market and verifying that your financial goals align with your business’s performance. Necessary budget adjustments allow you to reallocate resources, alter sales targets, and fine-tune your strategies for the upcoming quarters.
Morgan & Associates Can Help with Quarterly Accounting
Attention each quarter to these five accounting tasks not only helps maintain financial accuracy but also provides a solid foundation for decision-making. Don’t wait until the end-of-the-year rush to ensure financial accuracy. Mistakes and surprises happen, which derail your goals and budget. Start implementing these quarterly accounting tasks today.
If you need expert guidance, reach out to our team of experienced accountants. Use the contact form below to start a conversation.