Part 5 - Weekly and Monthly Routine Tasks

The post follows from Part 4 - Managing Multiple Currencies

Often what happens after people have learnt how to create transactions in an accounting software is the question “What’s next… what is the purpose of this and how do I organise myself?”. Learning about how to do bank reconciliation and the like is one thing… but it’s only a small part of a bigger thing - that bigger thing is managing your business accounting on an ongoing basis so that you can:

  • See how your cash flow is going.
  • Meet your tax obligations like BAS.
  • Have all your records on hand so that doing things like your tax return will be easier.

Think of managing your accounting like restocking your fridge on a weekly basis. You need to regularly perform tasks so that your accounts continue to be in order and things are kept up to date. If you don’t, just like a fridge, food goes off or there’s no food there - but not keeping your accounts in order is worse…. it means unreliable information for your reports and further, there’s nothing scarier than that notice from the tax office!

Here is a checklist of tasks you can perform for your business to make sure that your accounts are being maintained:

On demand

  • Invoices ideally should be created on demand (as requested). There is software that can be used to directly create invoices in Xero if you’re selling via ebay. Otherwise, this should be easy as you can invoice on the go with Xero via your mobile phone.

Weekly Tasks

  1. Enter in any bills that you receive. You can do this on demand, but I find it easier to do it in one sitting per week.
  2. Bank reconciliation. You can organise bank feeds so you don’t have to import your bank transactions. Check that the bank balances matches that in your bank account and then start matching. This is really important because there can be errors in Xero or unauthorised bank transfers that can get picked up doing a bank reconciliation. Make sure you do this for your bank accounts, credit cards and any other online payments e.g. paypal account.
  3. Reconcile your clearing accounts. A clearing account is kind of like the transit lounge. A transaction is put in there until it’s ready to be coded elsewhere. A reconciled clearing account should have a NIL balance. That means that transactions in there have been put to their final destination. To check your clearing accounts, go to Reports > All Reports > Account Transaction and enter in the relevant criteria and update the report. If your report is not showing a NIL balance for your clearing accounts, investigate it by exporting to excel and analysing the data.

The above tasks will be the ones you do regularly to keep your accounts in order to make the tasks below easier. It is the on demand and weekly tasks that will be important in providing you with relevant financial information in your reports.

The monthly and annual tasks below are things that you may need to do for compliance reasons.

Monthly Tasks

  • Reconcile your consumer tax accounts e.g. GST, VAT, Sales Tax (depending where you are located) - Doing this monthly will help with your activity statements at the end of the quarter. Here’s how you do this.
    1. Go to Settings > General Settings > Financial Settings and check that your settings are correct.
    2. Go to Reports > Click “Published” tab and check your last published tax statements so that all is in order.
    3. Only if you have adviser status in Xero - Go to Reports > and select “Consumer Tax Reconciliation” report. Check that the starting date is the date after your last published report and check the closing balance.

Quarterly or when scheduled

Annual Basis

  • Tax Return - Usually you’d get your tax accountant to do this, but you could also DIY.
  • Budgets - This helps you plan out financial spending and income for the year to see if you’re on track as anticipated. Xero has a great feature called Budget Manager in which you can do this. This is covered in Part 8 of this guide.

The next section is Part 6 - Doing Your BAS in Xero.

Next: Part 4 - Accounting for Multiple Currencies

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