Monthly Bookkeeping
Bookkeeping is essential when it comes to business management. Daily, weekly, monthly, quarterly, and yearly bookkeeping helps keep small businesses afloat, organized, and prepared for tax season. Even in times of economic stress and uncertainty, organized and accurate bookkeeping can provide some much-needed security to business owners. If your business doesn’t focus on daily or weekly bookkeeping, shifting that focus to monthly bookkeeping is a great start. But how do you know where to begin? What documentation should be included? And how can you customize it to fit your business’s individual needs?
That’s where DeMar Consulting Group can help! Here’s our recommended monthly bookkeeping checklist for small business owners. Keep in mind, there’s no “one-size-fits-all” when it comes to monthly bookkeeping. These steps can easily scale up for larger businesses, too.
1. Recording and Analyzing Business Revenue and Expenses
The first step to take at the end of every month is to sit down and review your business’s cash flow. Make sure you record all income, even if some invoices are still past due. Staying on top of your cash flow builds strong financial habits and gives you the clearest picture of where your business stands month to month.
2. Processing Payroll
Your employees have to get paid, too! During your monthly bookkeeping, double-check employee wages, hours, and benefits to make sure everyone is properly compensated. Some businesses choose to pay employees weekly, bi-weekly, or monthly—it’s entirely up to you. Just make sure you evaluate your payroll records at the end of each month so everything stays on track for accurate bookkeeping.
3. Approving Tax Payment Obligations
As a business owner, you’re responsible for meeting certain tax obligations generated by your business. This includes handling local, state, and federal payroll taxes, along with income tax withholdings for Medicare and Social Security. Staying prepared throughout the year will save you stress come tax season, help you avoid penalties, and make audits a lot less daunting.
4. Reconciling Accounts
Developing a strong monthly bookkeeping checklist requires reconciling your accounts. Take the time to go through each financial statement and make sure any discrepancies are caught and corrected. Review your credit card transactions, POS systems, merchant accounts, bank accounts, and balance sheets to make sure your reporting stays accurate. Reconciling weekly or bi-weekly can save you a lot of time at the end of the month and helps catch any errors as they happen instead of later.
5. Month-End Close
Month-end close is when you collect and review all your financial statements for the month, locking in the numbers before moving forward. This gives you clarity on your finances, helps you make better decisions, and builds a strong foundation for your year-end close. You can easily combine month-end close tasks with the financial statements on your monthly bookkeeping checklist.
6. Financial Statements Preparation
No monthly bookkeeping process would be complete without preparing your financial statements. These can include income statements, cash flow statements, balance sheets, profit and loss statements, and a budget comparison. If you’re unsure which financial reports your business should focus on, reach out to your CPA or schedule a free consultation here (interlink).
7. Update Documentation
Last but not least, take some time each month to review and update your business documentation. Make sure you’re staying compliant with both state and federal regulations, especially for nonprofit organizations. Learn more about our nonprofit financial consulting services. It might seem tedious, but reviewing documentation regularly saves you a lot of time, stress, and confusion when you really need those records later on.
If you have any questions, we are here for you! Use this link to book a free consultation with one of our professionals. Let us help with your bookkeeping!
