Keeping your books organized every month helps you avoid mistakes, stay on top of your finances, and be ready when tax time rolls around. Whether you’re just getting started with bookkeeping or looking to tighten up your current process, this checklist gives you the key tasks to cover each month to keep your business on track.
1. Record All Income and Expenses
What this means:
Log every dollar coming in and going out of your business.
Why it’s important:
Helps you see where your money is going and keeps your records accurate.
How to do it:
- Use software like QuickBooks, Wave, or a spreadsheet.
- Match your entries with receipts or invoices.
New to this? Start with one account (like your main checking account) and get used to entering info weekly.
2. Reconcile Bank and Credit Card Accounts
What this means:
Make sure your records match what your bank or credit card company says.
Why it’s important:
Catches errors, fraud, or forgotten transactions.
How to do it:
- Get your monthly bank/credit card statement.
- Compare it line by line with your bookkeeping records.
- Fix any differences.
Tip: Most bookkeeping software can connect to your bank and help you reconcile faster.
3. Categorize Transactions
What this means:
Assign each transaction to a category like “office supplies,” “client income,” or “software.”
Why it’s important:
Makes your reports meaningful and helps at tax time.
How to do it:
- Use your software’s chart of accounts.
- Be consistent. Don’t switch categories month to month for the same type of expense.
Tip: Start small—focus on income and your top 5 expenses.
4. Review Unpaid Invoices
What this means:
Check if any customers owe you money.
Why it’s important:
Unpaid invoices = lost revenue. Following up helps you get paid.
How to do it:
- Pull a report of “Accounts Receivable” (A/R).
- Email or call clients with overdue invoices.
- Record payments once they’re received.
5. Review and Pay Your Bills
What this means:
Make sure you’re paying your vendors, suppliers, and service providers.
Why it’s important:
Keeps your business running and avoids late fees.
How to do it:
- Review outstanding bills (Accounts Payable).
- Schedule or make payments.
- Mark bills as paid in your records.
6. Review Your Cash Flow
What this means:
Look at the money coming in vs. the money going out.
Why it’s important:
Helps you know if you can cover expenses and plan ahead.
How to do it:
- Use a cash flow report in your software or a spreadsheet.
- Compare to last month.
- Look for warning signs like more money going out than coming in.
7. Handle Payroll and Contractors
What this means:
If you pay employees or contractors, make sure payments are correct and on time.
Why it’s important:
Keeps you compliant with tax laws and avoids penalties.
How to do it:
- Run payroll and save pay stubs.
- Pay payroll taxes if required.
- Send 1099s for contractors at year-end (if they earned $600+).
8. Organize Your Receipts and Documents
What this means:
Keep copies of receipts, invoices, and bank statements.
Why it’s important:
Supports your records if you’re ever audited.
How to do it:
- Scan or take photos of receipts.
- Use a tool like Google Drive or Dext.
- Save files by month and type (ex: “2025 March – Receipts”).
9. Review Key Reports
What this means:
Look at a few basic financial reports.
Why it’s important:
These show if your business is making money, losing money, or breaking even.
Key reports to check:
- Profit and Loss (P&L) – Are you making a profit?
- Balance Sheet – What does your business own and owe?
- Cash Flow Statement – How’s your actual cash movement?
10. Prepare for Estimated Taxes
What this means:
Set money aside for taxes if you’re self-employed or own your business.
Why it’s important:
Avoids big tax bills and penalties.
How to do it:
- Review net income.
- Use the IRS Form 1040-ES worksheet or talk to a tax pro.
- Set aside money each month.
Monthly bookkeeping doesn’t have to be complicated. Following this checklist each month will help you stay organized, make better decisions, and feel more confident about your finances.