Monthly Bookkeeping Checklist

Monthly Bookkeeping Checklist

Congratulations! You’ve decided to work from home and run your own business. It can be a very rewarding and challenging experience. More on that later. But for now let’s talk about how you’re going to keep track of all that money you’ll be making (might as well think positive from the start, right?!).

previewEvery business, regardless of size or type, will need to have some sort of bookkeeping routine. We need to know how much money we’re making and how much we’re spending on a regular basis. If you don’t have a bookkeeper hired to handle all the accounting stuff for you (which I highly recommend), it’ll be up to you to do it. A bookkeeping checklist can help keep you on track and up to date. This is how you know whether your business is making money or losing it. Not to mention that every year you’ll need this information to file your taxes with.

So what do you need to keep track of? And how often? Let’s create a monthly bookkeeping checklist to get you started.

Each month, you’ll need to track your income and expenses. I’ll be referring to a service based business today. Let’s get started!

 

Sort Your Information


FileStack_retouchedGather up all of your financial documents, such as receipts, invoices, and bank statements. Basically if it has to do with your business’ money, include it. All your information may not be in paper form. So much of our financial information is digital anymore. Don’t forget to check your email and bank websites.

Sort it into three sections.

  • Income – Money coming in
  • Expenses – Money going out
  • Bank Statements

 

Post All Income


typing on laptopI like to start with income because nobody likes to see negative numbers while they work. By starting out with income you get to see the money come in before you have to watch it go out.  

If you’re using QuickBooks, you’re going to enter your income as either invoices or receipts. In this example we’re using receipts. You’ll enter the date, the amount, what it was for and if it is taxable.

If your service or item is taxable in your state, QuickBooks can figure the tax for you. It’s a pretty handy feature.

 

Post All Expenses


Now post all of your expenses. Include all of your checks written, debit card receipts, and paid bills. When posting transactions in QuickBooks my rule of thumb is better too much information than not enough. Trust me, moving forward you’ll appreciate that you took the time to do this now.

Quick tip, before you post them, check them against the bank statement to see if they are listed there. You can usually download transactions from the bank directly into QuickBooks saving you time with data entry. Then go ahead and post any receipts that weren’t included on a statement.

Include the date, who was paid (the vendor), how much, and what for. If the expense you’re paying is not in the list you can always add it. Also if there is an account number or certain details that you need to know about this expense later, go ahead and jot that down in the memo section. Like I said, you won’t regret it.

 

Reconcile Statements


Some of you may be wondering why I didn’t just post the income from the statement like I did the expenses. Good question! I’m glad you asked.

My reason is because they may have been deposited in groups rather than individual. If you deposit your checks once a week for instance, the deposit amount is the total of all of the checks deposited together, not the individual payments.

In QuickBooks, you receive the money from your customer and deposit it in two separate steps. Just like it actually happens in real life. Your customer pays you and then you take the money to the bank to deposit. Two separate steps. When I post deposits in QuickBooks, it will show me a list of all the payments received that have not yet been deposited. I will then post the deposits in QuickBooks as I actually made them, including all of the separate payments.

 

I love when I can import bank statements directly into QuickBooks. It pulls in all of the transaction information associated with that particular statement. All of the information you need is not always included in the downloaded transactions so take the time to look at them and make sure you have everything you need. If not, edit the transaction to include all necessary information. QuickBooks has this handy little feature that will match the transactions it imports with the ones already posted in QuickBooks. So you get to go through and just accept those transactions as is. Then the only ones you’ll need to enter are the ones that weren’t matched.

Once all the transactions are posted, you can reconcile the account in a snap!

 

Review reports


After all the income, expenses, and statements have been posted. Run a Profit and Loss report, and a Balance Sheet report in QuickBooks for the month. Why these two? Because of the information they give you.

Profit & Loss Reports – A profit & loss report shows you a picture of your financial activity within a given period of time. (The whole month)

Balance Sheets – A balance sheet basically shows you a picture of where you are financially at one given point. (The last day of the month)

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Look these over carefully. Is everything included? Are they all showing up in the right places? These reports tell you how your business is doing financially. There are many other reports you can look at in QuickBooks but as the business owner, these two reports will give you a good overall view.

 

Backup QuickBooks Company File


It’s always a good idea to backup your company file at the end of each month. Then if by chance your computer crashes or you make a mistake the next month you can just restore the backup.

 

Filing


File all of your paperwork and/or digital files. The IRS likes documentation. Keep a copy of all of your receipts, invoices, statements, etc. on file.

 

So to recap, your monthly bookkeeping checklist would look like this:

 

monthly bookkeeping checklist

 

 

 

 

 

 

 

Best of luck to you and your new business,

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