Healthy finances are arguably the most important aspect of a successful business or startup. While marketing, operations, sales, and customer service are all critical, your finances make running these departments possible.

Managing small business finances may be more exciting for one person than the next (let’s be honest — not everyone likes dealing with numbers), but knowing how they work is a bare minimum requirement for every entrepreneur and small business owner.

In this article, we provide a checklist for the core financial tasks for business success.

Essential Financial Tasks That Every Successful Small Business Owner Manages

Cash Flow Management

As the saying goes, “cash flow is the lifeblood of a business.” 

If you’re new to how cash flow works, or want to brush up on the basics, read our article “What is Cash Flow?” In a nutshell, “cash flow” is defined as “the journey of financial assets into and out of your business.” It’s tracked in the “cash flow statement” section of your accounting, and is split into three sections: Operations, financing, and investing.

If you calculate cash flow on your own, you can use our template to make the process easier. You can also consider outsourcing your calculations to a CPA to ensure accuracy.

Once you’re up to speed on how it works, read our article “What You Need to Know About Managing Cash Flow Post COVID-19.” Here, we cover five key metrics to pay attention to, including your income, expenses, accounts receivable aging, accounts payable aging, and your cash flow metric. 

Two ways to increase your cash flow are to apply for small business loans and business credit cards. Use Nav to instantly find your best options based on your business data. 

Invoicing Tasks

Everyone loves getting paid, but preparing invoices may not be the most exciting process in the world. Nevertheless, it’s important that you bill your clients and customers accurately to keep your cash flow and financial health in top shape.

Thankfully, there are software solutions that take care of a lot of the tedious tasks associated with invoicing. Read our article “Best Invoicing Software for Small Businesses” for a guide on how to choose the right software for your business.

We cover all the details you need to consider, including which payment types the software accepts, whether it has the ability to charge late fees, and how many invoices are included in the plan.

Expense Management

It goes without saying that incurring expenses is a necessary part of growing your business, but make sure to track them carefully so they don’t unnecessarily eat into your profits. Failure to pay certain expenses, like loan debt, can also hurt your business credit. Head to the following link to learn more about how to establish business credit.

One of the best ways to keep your expenses under control and manage business finances is to regularly review your small business accounting process and cash flow statements. Pay attention to which items you’re paying for and how much value they’re providing for your business. Performing a cost-benefit analysis for each expense item is a good way to determine if you should continue paying for it going forward, or if it’s a waste of money. 

Sales Tax Management

Unless your business operates exclusively in Alaska, Delaware, Montana, New Hampshire, or Oregon, you’ll likely have to pay sales tax on your transactions. 

Remember that your profit per sale doesn’t end with revenues and cost of goods sold. One of the additional factors you need to factor into your accounting and financial planning is sales tax, which can clock in at seven percent or higher.

Failure to incorporate sales tax in your planning can throw your bookkeeping off. It can also hurt your cash flow, which can in turn hamper your business operations, debt repayment, and even your ability to pay taxes. 

Daily Financial Tasks for Small Businesses

Items that change every day should be updated daily. 

For example, if you accept physical payment via cash or checks, consider depositing them to your business bank account daily. In the same spirit, make sure any necessary cash payments are taken care of. This may be relevant if you have a loan with a daily repayment schedule. Also be sure to set aside time daily to reconcile your inventory, as well as ensure the data that’s syncing to your Quickbooks, Turbotax, or other accounting software is accurate.

Building these daily tasks into your workflow can help make sure you don’t lose track of important cash flow components. This is especially important if your business receives multiple transactions a day.

Monthly Financial Tasks for Small Businesses

Every month, set aside time to review all your financial reports and accounting tasks, including cash flow, income statements, credit card balance, balance sheet (assets and liabilities), and bank statements. This can help you spot errors or suspicious activity, as well as help you benchmark your performance against your goals. 

During this time, you may realize you need to adjust your marketing or operations strategies in order to increase your profitability. Or you might find that you need to tweak your budgeting to support future business activities.

If you have outstanding accounts receivables, this is also the time to follow up with customers to request payment, or start charging interest or late fees. 

Quarterly Financial Tasks for Small Businesses

Repeat all the tasks mentioned in the monthly section above quarterly. Review your financial records and performance, and compare them against your goals for the next quarter. Ask yourself if you need to make any adjustments to better meet your financial targets. Also ask yourself if there are any new expense control processes that need to be implemented.

Don’t forget to make your quarterly tax payments to avoid incurring penalties from the IRS. You may also want to check your salary expenses and decide whether you can give your employees a raise to boost morale. Finally, if you paid taxes the previous quarter, review your tax returns to ensure accuracy.

Annual Financial Tasks for Small Businesses

At the end of every year, benchmark your financial statements once again against your goals. Compile your year-end statements and submit them to relevant parties (i.e. investors and stakeholders). Make plans and adjustments for the following year. 

Also calculate your sales tax, payroll tax, income tax, and other business tax. Prepare your cash reserves for the amount owed. If you’re short on cash, you may want to consider applying for small business loans, which can help you keep your operations running without cutting into your existing cash balance. The easiest way to find the right loan for your business is to use Nav. Our platform instantly finds your best options based on your business data.