Monthly Bookkeeping Checklist for Small Businesses: What Should Your Bookkeeper Handle?
Proper bookkeeping is an aspect of a healthy small business. With your books being updated monthly, you know more about how your business is doing, where your money is being spent, and what areas need focus.
But bookkeeping is about more than just tracking income and expenses. Here are nine key activities a good monthly bookkeeping routine will include.
Must-Have monthly bookkeeping checklist every business needs an in-house bookkeeper, a bookkeeper elsewhere, or to accomplish certain activities on their own.
This weekly bookkeeping checklist can help you know what is supposed to be done.
1. Record All Business Income
The first step is making sure all business income has been recorded correctly.
Your bookkeeper should review payments received during the month and make sure they are properly entered into your accounting records.
This may include:
Customer payments
Credit card payments
Bank transfers
Online payments
Other business income
Every transaction should be recorded in the appropriate account so your financial reports show an accurate picture of your revenue.
2. Record and Categorize Expenses
Your bookkeeper should also review business expenses for the month.
Expenses should be recorded and placed into the correct categories. Common categories may include:
Office expenses
Advertising and marketing
Software
Rent
Utilities
Insurance
Travel
Professional services
Equipment
Contractor payments
Proper categorization makes it easier to understand where your business is spending money and helps keep your financial records organized.
3. Reconcile Bank Accounts
Bank reconciliation is an important monthly bookkeeping task.
Your bookkeeper should compare the transactions recorded in your accounting system with your bank statements. The goal is to make sure the two records match.
This process can help identify:
Missing transactions
Duplicate entries
Bank fees
Incorrect amounts
Unrecorded payments
Other bookkeeping errors
Regular reconciliation helps keep your financial information accurate.
4. Reconcile Credit Card Accounts
If your business has credit card accounts, those accounts need to be reviewed monthly as well.Your bookkeeper should cross-reference credit card statements to those shown within your accounting.
This ensures that the purchases have been correctly recorded, and the balance outstanding is correct.It offers you with a clearer picture of how your business is spending.
5. Review Accounts Receivable
Accounts receivable refers to money customers owe your business.
Your bookkeeper should review outstanding invoices each month and identify which customers have unpaid balances.
The review can help answer questions such as:
Which invoices are overdue?
How much money is outstanding?
How long have customers owed the money?
Which customers may need a payment reminder?
Keeping track of accounts receivable can support healthier cash flow.
6. Review Accounts Payable
Your bookkeeper will need to check the money your business owes to vendors and suppliers.
These records are a way for you to track which payments have been made and which are missing.
Checking your accounts once a month can help you spot missed payments and give you time to budget for upcoming bills.Your bookkeeper can prepare invoices for you by their due dates so you understand your anticipated financial responsibilities in the short-term.
7. Check Payroll-Related Records
If you have employees, then payroll reports need to be checked on an ongoing basis.
Some bookkeepers will enter payroll transactions, employer expenses, contractor reimbursements and various other payroll related entries if it forms part of your bookkeeping agreement.
Payroll must be maintained in an accurate and well-organized manner as it impacts the business expenses and the financial statement.
8. Review Financial Reports
One of the biggest benefits of monthly bookkeeping is having current financial reports.
Your bookkeeper should help prepare and review reports such as:
Profit and Loss Statement
Balance Sheet
Cash Flow Statement
Accounts Receivable Aging Report
Accounts Payable Report
These reports can help you understand how your business is doing.
For example, your Profit and Loss Statement can show whether your revenue is increasing and whether certain expenses have grown. A Cash Flow Statement can help you understand how money is moving through the business.
9. Look for Unusual Transactions
Bookkeeping on a monthly basis should not just be entering numbers on a data sheet.
Your bookkeeper will review transactions that seem odd or unexpectedly large.
For example a payment may seem to be much higher than usual or a transaction could have been entered into the wrong account.
Addressing these problems early can help to solve them more easily.
10. Organize Financial Documents
Keep receipts, invoices , bank statements, bills, and other paperwork in order on a routine basis.
Digital recordkeeping can also make it easier to find documents when you need them.
Maintaining records can also help with tax preparation and provide the accountant or tax professional with what they need.
11. Review Your Monthly Numbers
Once the bookkeeping is complete, take some time to review the results.
Look at your revenue, expenses, profit, cash flow, unpaid invoices, and upcoming bills.
Ask simple questions:
Did revenue increase or decrease?
Which expenses changed?
Are customers paying on time?
Do I have enough cash for upcoming expenses?
Are there areas where I can reduce unnecessary spending?
You do not need to be an accountant to start understanding your business numbers.
A Simple Monthly Bookkeeping Routine Can Make a Big Difference
It becomes easier to do bookkeeping with daily transactions rather than waiting a few months.
Microsoft accounting software should be used to prepare and record income and expenses reconciliation handling invoices, bills, and documentation, as well as preparing reports and a financial overview every 30 days.
Keeping up with all of these takes time that a busy business owner needs to spend running the business instead. Having professional bookkeeping assistance will allow you to have up-to-date records, but also to free up precious time to spend with customers, staff, and growing your business.
The Bookkeeper Marketplace can help small business owners connect with bookkeeping professionals who can handle the monthly financial tasks their business needs. Whether you need help with reconciliations, financial reports, accounts receivable, expense tracking, or regular bookkeeping, finding the right professional can make managing your business finances much easier.
A consistent monthly bookkeeping process does more than keep your records organized. It gives you better financial visibility and helps you make informed decisions throughout the year.
Explore more:https://www.mycpaoncall.com/post/catch-up-bookkeeping-vs-ongoing-bookkeeping-what-does-your-business-need
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