monthly bookkeeping checklist

Any bookkeeper knows one of their key responsibilities is recording accounts payable invoices daily. Completing this daily task allows you to build a good relationship with the bank and establish a paper trail in case any questions arise about a company’s finances. Overall, making daily deposits goes a long way toward keeping your clients’ finances in order. Sometimes you only need your financial statement presentation to conform to the Income Tax Act. This bookkeeping checklist is slightly different as your accountant or tax preparer requires a bit more to complete their task.

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Before moving on to anything else, you need to review the accuracy of your business cash and credit transactions in order to work with your exact cash position. To do so, reconcile your bank accounts and credit cards at the close of each month, helping you easily find and amend any mistakes. This can be done by reviewing your statements to flag any suspicious credits, debits, canceled transactions, or double charges. Once you have thoroughly examined your monthly bank and credit statements and are confident in its accuracy, you can complete the rest of your monthly bookkeeping tasks.

Formal Bookkeeping Checklist Template

Below, we discuss the basics of creating a monthly bookkeeping checklist tailored to your business by exploring eight of the most important accounting tasks. Our monthly bookkeeping checklist template will help make the process simpler and more efficient for your firm. Our monthly bookkeeping checklist template was carefully created to include all the necessary steps needed to accurately complete the monthly bookkeeping process for your clients.

  • Take
    a full 30 Days to put the “The Bookkeeping Checklists” to the
    test.
  • When you were the owner of a smaller business, monthly bookkeeping may have been all you required to keep accurate financial records and projections.
  • The only thing bookkeepers really don’t need are your personal receipts.
  • While bookkeeping may be the lowest tier for accounting and financial management, it is one of the most important elements because it is the building block for all other financial aspects of the business.
  • Record all business-related expenses, categorizing them for accurate analysis.

The sooner you can get a customer to pay their invoice, the more likely they are to pay. It’s also better to catch any accounting errors within the current month to prevent a snowball effect of errors from month to month. Also, transactions are more likely to still be fresh on your mind. This information will be used to generate the profit and loss statement and as supporting documents for your taxes or any audits that may come your way. Payments taken with credit cards count as business revenue, and qualified business expenses are tax deductible. Are the tasks in the Monthly Bookkeeping Checklist Template accurate?

Back up your data.

All cash, bank, and credit card accounts should be reconciled on a monthly basis to ensure that your financial status is an accurate portrayal of your business. One important part of the process is to go back and look at the undeposited funds from the previous month to see if they cleared during the current month. When you were the owner of a smaller business, monthly bookkeeping may have been all you required to keep accurate financial records and projections.

With proper record-keeping, you’ll not only comply with regulations but also set the stage for your business’s growth and success. Verify credit card transactions against your records, accounting for any discrepancies. Using this report regularly is a really good way to stay ahead of invoicing, suggests Denise Zollo, owner of Zollo Accounting & Tax Services LLC. After reviewing it, you’ll know what money you need to collect from clients and what needs to be invoiced and closed out for income recognition purposes. As a small business owner, it is important to understand your cash flow goals.

Review month-end balance sheet vs. prior period

And the checklist is then used in keeping the transactions and the other items to be recorded for further use in accounting etc. Download the templates of the bookkeeping document checklist for the overall maintainence of the accounts. The monthly bookkeeping checklist must have in the various transaction that takes places in and out of the business.

  • Introducing the right accounting automation tools into your monthly accounting checklist is a game changer.
  • Once you calculate and file your sales tax, begin focusing on any open deposit reports.
  • Although it seems pretty obvious, this task is often overlooked, which can cause unnecessary complications or emergencies if there is no available cash to spend.
  • To do so, reconcile your bank accounts and credit cards at the close of each month, helping you easily find and amend any mistakes.
  • Sometimes it’s in their places of business—a plant shop that looks more like a jungle, a retail store’s back room full of boxes, or even a restaurant floor in the middle of the lunch rush.
  • Be sure to include an “aging” column to separate “open invoices” by the number of days a bill is past due.

Dig a bit deeper and find out why that is if you’re seeing a change that you didn’t anticipate. Review your current inventory https://www.bookstime.com/articles/inventory-accounting to determine the value of items not sold. Any write-down of inventory translates to a deduction on your year-end taxes.

At tax time, carefully review your company’s full-year financial reports before giving them to your accountant. Before you sign your return, be sure to review it for accuracy based on your full-year financial reports. If the CRA audits your company and finds any underpayment of taxes, it will come to you, not your accountant, for any additional taxes, penalty, and interest. Keep copies of all invoices sent, all cash receipts (cash, cheque, and credit card deposits), and all cash payments (cash, cheques, credit card statements, etc.). This report is crucial when reviewing vendor deposits on project, inventory purchase orders that have not yet been applied to a vendor invoice, and deposits that have been partially used on vendor invoices. The Open Vendor Deposit Report needs to ensure that orders are properly filled by the vendor.

Before we jump into the essential bookkeeping checklist for small business owners, let’s quickly touch on why it’s so important to have a bookkeeping checklist in the first place. If you’re not using cloud-based accounting software that automatically backs up your data, make sure to back up your financial data manually at least once a month. This will give you peace of mind that you won’t lose your data if you have a hardware failure or file corruption. The end of the month is the perfect time to review all invoices and understand the balance of aged receivables.

Standardize processes across your firm:

Without a well-documented bookkeeping process, your firm may not be meeting its full potential in terms of profitability and growth. Staff may spend more time on each client, double checking which tasks are missing. This inefficiency has a knack for snowballing as your team members play catch-up with any missed assignments. Tracking your clients’ cash position means knowing how much money their company has on hand at any given time and making sure expenses get paid on time. Maintaining accurate payroll records for your clients is essential. However, it can be a challenge to keep up with the paperwork on a daily basis.