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5 Essential Bookkeeping Tasks You Should Complete Every Month

bookkeeping Nov 16, 2021
Bookkeeping Mess

I get it; you are a business owner with many responsibilities. You’re working hard to make a profit, keep the doors open, and have a healthy business. But all that hard work won't matter if your finances are not in order. 


By doing these essential bookkeeping tasks, you are making sure your business is profitable and thriving. It is also the best way to make informed financial decisions. Using the right accounting software and making sure your books are reconciled and up to date will give you an advantage over the competition, save you time, money, and undesirable headaches. 


These tasks are only the essentials; there is so much more that should be done. You or your bookkeeper should do at least these five bookkeeping tasks every month.


1. Save all Receipts and Expenses 

 It is essential to keep copies of all your receipts and expenses. Keeping receipts makes it so much easier to track and justify your business deductions at the end of the year. The easiest way to do this is by 

  • digitizing or scanning all your receipts

  • using software like Dext that communicates with your accounting software

  • keeping a digital folder in your computer with pictures or scanned copies of all your receipts

  • you can also keep a paper folder, but paper receipts fade over time, and faded receipts are not admissible during an audit. 

 Pro Tip: Providing Bank Statements to the IRS instead of receipts won't justify a deduction. If you don't produce actual receipts during an audit, those deductions will not be allowed.


2. Automatically Import all Transactions from your Bank

 Link your bank and credit card accounts with Quickbooks or your preferred accounting software to ensure that

  • transactions are not duplicated

  • You are saving time since you don't have to import hundreds of transactions manually. 

 Pro Tip: Even if your bank balance and QuickBooks amounts match when you are done accepting or matching transactions, it’s still essential to conduct a complete reconciliation of your accounts each month.


3. Reconcile all Accounts

 When I say reconcile all accounts, I mean all accounts: Checking, Savings, Loans, Credit Cards, Paypal, and any others you may use. All transactions should match their respective statement and be in balance. If balances don't match, figure out why. 

  • Did you forget to add a transaction? 

  • Are all accounts syncing correctly? 

  • Did you record the interest income? 

 Pro Tip: Reconcile monthly and make sure there are no errors; this ensures clean, balanced books. 


4. Review Financial Reports 

 Running reports with Quickbooks or any other accounting software is super easy. These reports should give you a clear picture of your money; if transactions and information were entered correctly.

  • The Income Statement (Profit & Loss) explains how much money came in and how much went out (Income and Expenses) during a particular period. 

  • The Balance Sheet summarizes financial balances that report a company's assets, liabilities, and shareholder equity.

  • The Statement of Cashflows is a financial statement that shows how balance sheet accounts and income changes affect cash and cash equivalents.

 Pro Tip: Knowledge is Power; use this information to set goals, understand your numbers and grow your business.

5. Budget Review 

 Check your budget monthly to ensure you are on track with your projections, this allows you to make changes and updates if needed. Things change, budgets change; this is normal. Don't feel discouraged if you need to adjust and make changes; on the contrary, knowing early and pivoting is part of excellent organizational and financial skills.  

  • better manage your spending habits, 

  • increase your savings, 

  • make progress toward your long-term financial goals.

Pro Tip: Don't create your budget to mirror your expenses, instead analyze and set realistic monthly numbers that work for you and your business and stick to it. Then review your costs and cut costs that are not needed or haven't been used in a while. 

How many of these tasks are you doing each month? Are your finances up to date?

 If you are too busy, feeling overwhelmed, or need some extra time to be more present in other aspects of your business or your personal life, reach out; we are happy to help. 


“It’s not about better time management. It’s about better life management” - Alexandra of The Productivity Zone

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