Keeping your books up-to-date is essential if you want to run a successful business. Bookkeeping, on top of all of the other responsibilities that come with running a business, can feel very overwhelming to small business owners, especially when there are tasks that need to be completed on a daily, monthly, quarterly, and annual basis. Part of the struggle is knowing what needs to be done and when.

This is why having a bookkeeping checklist is so important. A monthly bookkeeping checklist is a great organizational tool that will keep your business on track and help ensure that all financial responsibilities are being met in a timely manner.

Monthly Bookkeeping Checklist [Free Downloadable Template]

A monthly bookkeeping checklist is a simple method for keeping track of what needs to be done. Simply check off the task from the monthly bookkeeping checklist template as completed and move on to the next task.

Record and categorize all revenue and expenses
Record and categorize all revenue and expenses for the month, including credit card revenue transactions and individual credit card purchases. 

Reconcile business accounts
All cash, bank, and credit card accounts should be reconciled on a monthly basis to ensure your financial status is an accurate portrayal of your business. 

Review and follow-up on past due accounts
Review any past due accounts and send reminders to those customers who are late on their payments. 

Record and issue payroll
Payroll should be issued and accurately recorded. The records need to be supporting evidence for the payroll payments.

Take care of any tax obligations
Make any required payroll federal or state tax payments or filings to the appropriate agencies. 

Update W-9 information if needed
Make sure that all vendor W-9 records and information are up-to-date monthly to make it easier when it comes time to submit tax documents.

Perform the month-end closing process
Certain accounts must be closed out before preparing the monthly financial statements to reflect the company’s true financial status. 

Prepare monthly financial statements
Prepare a monthly income statement, balance sheet, and cash flow statement and compare them with last month’s, your budget, and the same month for the previous year to make sure your business is staying on track.
Monthly Bookkeeping Checklist [Free Downloadable Template]

What follows is a comprehensive bookkeeping monthly checklist of all of the accounting tasks that need to be completed. This is a simple method for keeping track of what needs to be done. Simply check off the task from the monthly bookkeeping checklist template as completed and move on to the next task. (Note: Use the free downloadable at the end of the article.)

See also: Tax Checklist 2022: What to Know, Do, & Prepare for Tax Filing Day

1. Record and categorize all revenue and expenses

Record and categorize all revenue and expenses for the month so that you can keep up with the financial status of your business on a monthly basis. This includes credit card revenue transactions and individual credit card purchases. 

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.

See also: What Is Annual Revenue? Meaning, Formula & Examples

2. Reconcile business accounts

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.

It’s also better to catch any 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.

3. Review and follow-up on past due accounts

It’s important to review any past due accounts and send reminders to those customers who are late on their payments. The sooner you can get a customer to pay their invoice, the more likely they are to pay. 

It’s also important to hold a customer to their payment terms because this can have a big impact on your cash flow. This is also a good time to re-evaluate your collections process to see if it is effective or whether any changes need to be made.

Not only do you need to check to see if there are any customers who owe you, but you also need to make sure that you haven’t missed any payments to vendors that you owe.

4. Record and issue payroll

Paying your employees on time is extremely important. After all, they have financial obligations that need to be met as well. Payroll, if applicable, will need to be run at least once a month. 

Not only should payroll be issued, but it also should be accurately recorded. The records need to be supporting evidence for the payroll payments.

5. Take care of any tax obligations

Be sure to make any required payroll, federal, or state tax payments or filings to the appropriate agencies. Also, annual, quarterly, and monthly sales tax returns must be filed with the state where your business is conducted.

6. Update W-9 information if needed

Make sure that all vendor W-9 records and information are up-to-date. Since contractors and employees come and go, if you keep all of their information updated on a monthly basis, then it will be so much easier when it comes time to submit tax documents.

7. Perform the month-end closing process

Certain accounts must be closed out before preparing the monthly financial statements to reflect the company’s true financial status. The temporary accounts need to be closed out so that the next period can start from zero. 

Therefore, the month-end checklist should include journal entries for revenue accounts to be closed to the income summary account and expense accounts to be closed out to the income summary account. The Income summary then closes out to retained earnings and dividends closes out to retained earnings.
See also: Cash Receipts Journal: Meaning, Steps, Examples

How To Create a Month End Close Checklist. Start With The Financial Statements Line Items! By The Financial Controller

8. Prepare monthly financial statements

Prepare a monthly income statement, balance sheet, and cash flow statement. You should not only prepare these financial statements but also compare them with last month’s, your budget, and the same month for the previous year to make sure your business is staying on track. If not, it may be time to revise your budget and rethink your goal and business plan.

Free downloadable template: monthly bookkeeping checklist

Download the free downloadable PDF to help you keep track of your monthly bookkeeping tasks.

  • Free downloadable template: monthly bookkeeping checklist [PDF]
  • Free downloadable template: monthly bookkeeping checklist [PNG]

In conclusion

A monthly bookkeeping checklist will save you time because it takes the guesswork out of what financial matters need to be addressed next. A checklist makes sure nothing falls through the cracks and keeps you organized and efficient so you can focus on other aspects of your business. It also ensures that you are meeting all of your financial responsibilities and deadlines. Missed deadlines can be a costly mistake resulting in some hefty fines and penalties.

Caryl Ramsey has years of experience assisting in different aspects of bookkeeping, taxes, and customer service. She uses a variety of accounting software for setting up client information, reconciling accounts, coding expenses, running financial reports, and preparing tax returns. She is also experienced in setting up corporations with the State Corporation Commission and the IRS.


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