Top Accounting Best Practices for Small Businesses

Managing the financial side of a business requires more than just recording transactions. It calls for standardized systems, timely processes, and strategic oversight that align with today’s expectations for transparency and efficiency.

Whether you’re part of a growing finance team or running a lean operation as a founder, applying accounting best practices ensures that your reporting is accurate, your data is auditable, and your business is prepared for anything from tax season to an investor review.

At its core, accounting best practices are the consistent and repeatable procedures used to track, classify, report, and audit financial data. These practices help businesses reduce risk, stay compliant with regulations, and gain real-time insight into performance. By adopting these methods, your accounting department moves from reactive bookkeeping to proactive financial management.

This guide outlines proven techniques used across industries to maintain compliance, reduce human error, and improve strategic decision-making. You’ll learn how to structure a useful chart of accounts, automate repetitive tasks, move beyond spreadsheets, and set up your organization for scalable success.

Building a Strong Chart of Accounts

A chart of accounts (COA) is the foundation of all financial reporting. It categorizes your transactions into clearly defined buckets—such as revenue, expenses, assets, liabilities, and equity—that allow for consistent tracking and analysis. Without a clear COA, even the best software or talent won’t be able to produce clean reports or audit-ready documentation.

Why Account Segmentation Matters

Organizing your COA by department, region, or function is a critical step toward improving visibility across the business. This kind of segmentation helps you isolate financial activity in each part of the organization. You can see how one office performs versus another, or understand which product line is the most profitable. GlassJar’s accounting software supports subaccount structures, so your accounting team can track performance by team, project, or vendor in real time.

Connecting Chart Structure to Reporting

This level of granularity also plays a key role in implementing financial reporting best practices. When reports pull from a consistent chart of accounts, they provide cleaner financial statements that your CPA or external auditor can review quickly. It also helps when preparing your annual report, offering accurate comparative data and a breakdown of operational costs in a way that aligns with investor expectations.

COA for New Businesses and Non-Accountants

For those who are new to the concept, think of the COA as your company’s internal financial language. If every team uses different terms or accounts, communication breaks down. But when the entire accounting department operates from the same COA, reports become more useful, audits are less stressful, and planning becomes more strategic.

Automating Everyday Accounting Tasks

Manual accounting processes don’t scale well. As your business grows, it becomes harder to keep up with data entry, invoice tracking, payroll runs, and reconciliations. Automating these tasks is not just a matter of convenience—it’s a key part of modern accounting best practices.

Streamlining Accounts Payable and Receivable

Automated invoicing systems can generate, send, and track payments without human intervention. They flag overdue invoices, apply late fees, and even sync directly with accounts receivable ledgers. GlassJar integrates this automation across its invoicing and payment modules, helping you maintain a healthy cash flow without burdening your staff with follow-up tasks.

For accounts payable, automation helps avoid late payments, duplicate entries, and missed vendor discounts. Scheduled payments and smart reminders ensure that vendors are paid on time and that expenses are recorded immediately. These are core components of a reliable AP workflow that reduces audit risk and improves internal controls.

Payroll Without the Manual Workload

Payroll automation is another area where efficiency meets accuracy. Instead of manually inputting hours or calculating deductions, your system can sync with employee time-tracking tools and submit accurate pay runs on schedule. This not only reduces errors but ensures compliance with labor laws and tax obligations.

Data-Driven Planning Through Automation

At a strategic level, automation supports financial forecasting and planning. Instead of pulling together fragmented reports, your finance team can access dashboards that aggregate actuals versus budget in real time. This improves the speed and quality of decision-making, especially when preparing for investor calls or budget reviews.

Audit Readiness Through Automated Systems

Beyond convenience, automated processes ensure consistency, reduce human error, and support auditing best practices. When data flows into a single platform like GlassJar, there’s a clear record of who did what and when—a feature critical to both internal controls and external audits.

Eliminating Spreadsheets and Error

Despite their flexibility, spreadsheets remain one of the biggest risks in business accounting. They’re easy to corrupt, difficult to audit, and highly susceptible to user error. As businesses grow, relying on spreadsheets for financial tracking, forecasting, or reporting becomes increasingly problematic.

The Problem With Manual Spreadsheet Work

Errors in formulas, cell references, or logic can cascade through a spreadsheet without being noticed. A missing row, misplaced decimal, or overwritten value can distort entire sections of a report. These issues are hard to trace and even harder to fix. If your CPA finds inconsistencies in your financial statements, it often leads to hours of backtracking—wasting both time and resources.

Spreadsheets Aren’t Real-Time

Another key drawback is the lack of real-time data. Spreadsheets are static snapshots. They don’t pull in new transactions from bank feeds, reconcile entries automatically, or update based on changes to the general ledger. This creates lag in your reporting and limits your ability to act on fresh information. If an expense comes in after your monthly close, your spreadsheet stays out of date until someone manually updates it.

GlassJar Replaces Spreadsheet Dependency

GlassJar addresses these challenges by centralizing all financial data within one secure platform. From real-time financial statements to instant categorization of new transactions, the system eliminates the delays and discrepancies caused by spreadsheet-based reporting. And unlike spreadsheets, every transaction and journal entry is traceable and tied to a date and user—critical for audit and accounts tracking.

Scalability and Collaboration Issues

Spreadsheets can’t support collaborative accounting at scale. Version control becomes difficult, user access is hard to manage, and the risk of overwriting key data increases with every team member added to the file. As your accounting department expands, a lack of centralized systems leads to confusion, delays, and errors that affect everything from monthly close to investor reporting.

Bringing Structure to Growth

Implementing consistent accounting systems gives your organization the ability to scale operations with confidence. From bookkeeping practices to executive reporting, your internal finance structure plays a central role in how your business operates, earns trust, and makes data-backed decisions.

By embedding automation, segmentation, and standardization into your financial workflows, your team will not only save time—they’ll ensure compliance, improve accuracy, and follow best practices that align with the expectations of investors, auditors, and internal leadership. With a system like GlassJar, you build the financial backbone that supports sustained growth and minimizes audit risk.

Maintaining Clean Financial Statements

The integrity of your financial statements reflects the accuracy of your data and the discipline of your accounting processes. When financials are compiled inconsistently or without clear documentation, the risk of misstatements increases significantly. A key part of accounting best practices is ensuring that income statements, balance sheets, and cash flow reports are generated using consistent timing, classification, and reconciliation procedures.

Closing the books at the end of each month should follow a defined schedule with clear responsibilities across your accounting department. Transactions must be posted to the correct period, and all revenue and expenses should be accrued accurately. Following this standard monthly rhythm helps ensure quarterly and annual reporting is accurate and defendable—especially when your CPA or auditor reviews your books.

Best Practices for Reconciliations and Adjustments

Reconciling accounts is not just about catching errors—it’s a proactive process that verifies your financial records align with bank statements, payroll systems, and credit card processors. Adopting a regular cadence for reconciliations, particularly for high-volume accounts like cash, accounts receivable, and accounts payable, helps prevent fraud, reduce financial risk, and catch mistakes before they become systemic.

Many businesses still wait until the end of a quarter to reconcile key accounts, but this delay increases the likelihood of outdated or inaccurate financial reporting. With real-time bank feed integrations like those in GlassJar, companies can automate reconciliations and flag anomalies faster. This aligns directly with auditing best practices and enhances both internal and external transparency.

The Role of the CPA in Best Practice Oversight

Working with a certified public accountant is not just for tax season. A CPA serves as a critical partner in validating your accounting policies, improving internal controls, and ensuring that your systems meet GAAP or IFRS standards depending on your requirements. In fast-scaling companies, CPAs also play a central role in designing policies for revenue recognition, depreciation, amortization, and bad debt reserves—all of which directly impact your financial statements and reporting.

GlassJar’s reporting tools allow businesses to export clean general ledgers, trial balances, and journal logs that CPAs can review in standardized formats. Whether preparing for a board meeting or annual tax filings, a CPA can work more efficiently when accounting systems are built around standard conventions and best practices in accounting.

Audit Preparation as a Continuous Process

Audits can occur at any time, especially if your company is raising capital, applying for loans, or operating under regulatory scrutiny. The most successful businesses approach audit readiness as a year-round process—not a last-minute scramble. This includes logging every journal entry with proper documentation, maintaining backup for large or unusual transactions, and establishing controls for who can create, edit, or approve changes in your system.

GlassJar supports audit trails for every transaction and allows you to assign roles and permissions that control access across your accounting department. These controls reduce the risk of unauthorized changes and help you comply with best practices required under SOC or ISO frameworks.

Annual Reporting and Stakeholder Confidence

Annual reports are not just regulatory checkboxes—they’re opportunities to build trust with stakeholders, investors, and lenders. That means aligning your internal reports with annual report best practices, including consistency in account groupings, footnotes for material changes, and transparent breakdowns of revenue sources and liabilities.

Financial software like GlassJar ensures that year-end statements can be pulled directly from the system with accurate data and ready-to-use templates for presentation. Your finance team can quickly build reports that reflect operations, profitability, and long-term financial position—without extensive rework or formatting.

Scaling Your Accounting Infrastructure

As your organization grows, the complexity of your accounting environment increases. New locations, new revenue streams, and new tax jurisdictions all require scalable processes and systems. Without a strong foundation, growth can amplify problems in oversight, compliance, and reporting. Implementing accounting best practices early protects your company from disorganized financial operations later.

GlassJar is built to evolve with your business. From multi-entity consolidations to role-based dashboards for department heads, the platform supports the workflows that high-performing finance teams rely on. This scalability reinforces best practices by embedding consistency into your day-to-day accounting tasks.

Ongoing Education and Training

Even the best systems and software require human knowledge to operate effectively. Businesses should create regular opportunities for the accounting department to stay up to date on accounting standards, compliance requirements, and technology features. Whether it’s GAAP updates, changes to IRS reporting thresholds, or software training, ongoing education reinforces adoption of bookkeeping practices that reduce risk and ensure regulatory alignment.

GlassJar provides integrated help documentation, guided setup tools, and partner support resources to ensure that your team stays confident using the system. With the right processes in place, every person on your finance team can contribute to maintaining accurate books, timely reporting, and audit-ready documentation.