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Your accounting checklist

Nip cash flow problems with timely and accurate accounting.
By Henry Ong |
<>Make sure to check your accounts payable for the week. Find out which payable you can pay immediately with cash discounts, and which you can afford to delay without annoying your supplier. You also have to prepare how much money you need for your payroll for the coming week, and how much money you need for such other expenses as withholding taxes and VAT payments. By budgeting all the payments, you will get a good idea of how much money you need to raise from receivable collections and cash sales.


On a monthly basis, you will need to review the work of your bookkeeper. You can check if all the journal entries made are properly classified and posted to the general ledger. After checking the journal entries, you should expect your bookkeeper to make an income statement available to you 10 to 15 days following the close of the month. By reading the income statement, you can evaluate your business to see whether you need to adjust your pricing or reduce your overhead expenses to increase your income.




Pay attention to your balance sheet. With this, you can review the financial condition of your company, particularly in terms of how much your assets such as cash, accounts receivable, inventory and fixed assets are as compared to your liabilities to suppliers and banks, if any, and your invested capital. When reviewing your balance sheet, make sure that the cash account is reconciled with the bank balance so that any timing differences between the two accounts can be properly adjusted.

You need to conduct a regular cash count to check the petty cash maintained by your cashier. The actual cash in the petty cash box plus the total amount of paid-out slips should total the budget you have set aside for the month. In practice, you may want to do surprise cash counts to see if your cashier is honestly keeping the cash in the box. For monitoring purposes, you may also want to strictly implement a fixed monthly petty cash budget.




Mind your tax payments. For example, make sure that what you deduct as withholding tax from salaries is remitted completely to the BIR. Do the same for VAT payments. Remember that you need to compute and remit your VAT payments based on the sales and expenses that you legally declare.


Henry Ong, CMA, RFP, is president and COO of Business Sense Inc., a financial advisory and consulting firm that helps small and medium businesses. Business Sense is affiliated with INPACT International Network of Certified Public Accountants. You may reach him at

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