Financial Literacy Month for Small Businesses: A Bookkeeper's Checklist
Financial Literacy Month is a reminder to review the numbers that drive your business. Here is what small-business owners should check in QuickBooks each April.
Financial Literacy Month is observed each April, and for small-business owners and the accountants who support them, it serves as a useful prompt to step back from daily data entry and evaluate the overall financial health of the company. Understanding core financial concepts is what allows business owners to make informed decisions about hiring, pricing, and growth throughout the rest of the year.
Why Financial Literacy Matters for Small Businesses
A working knowledge of accounting fundamentals is essential for keeping a business solvent. When owners can confidently read a balance sheet and a profit and loss statement, they can spot cash flow bottlenecks before they become emergencies. Financial literacy also helps bridge the communication gap between business owners and their bookkeepers or tax professionals, ensuring that everyone is working from the same accurate baseline.
Reviewing Your Books in QuickBooks
If you use QuickBooks, Financial Literacy Month is a great time to perform a mid-year review of your accounting setup. We recommend focusing on a few core areas:
- Reconciliations: Ensure all bank and credit card accounts have been fully reconciled through the previous month. Unreconciled accounts make it difficult to trust your financial reports.
- Chart of Accounts: Review your chart of accounts for unused, duplicated, or misclassified entries. A streamlined chart of accounts makes your financial statements much easier to read.
- Aging Reports: Pull your Accounts Receivable and Accounts Payable aging reports. Knowing exactly who owes you money and which vendors you need to pay is a fundamental part of managing cash flow.
Building Better Financial Habits
Improving your financial literacy does not require becoming a CPA. It simply requires building a habit of regularly engaging with your financial data. Set aside time each week or month to review your key reports, and make sure you understand exactly what the numbers are telling you about your business operations. If you need help understanding specific reports or troubleshooting data that does not look right, our QuickBooks Online help resources offer practical guidance on running and interpreting standard financial statements.