The operation of the firm depends greatly on bookkeeping, a complicated process. If you keep a checklist to make sure that everything that has to be done has been done, the process can be made simpler. But what exactly is covered by this list? What must you keep an eye on? We’ve got your back, so don’t worry!
Here is a brief monthly bookkeeping checklist to help you stay on top of your finances.
- Recheck Cash Position
- Update Your Bookkeeping Software
- Record Revenue and Expenses
- Review Customer and Vendor Invoices
- Reconcile Your Records
- Sales Tax Returns
- Review Your Inventory
- Record Credit Cards Transactions
- Review Debt Accounts
- Review WIP Reports
Recheck Cash Position
Business owners frequently skip this step, which causes unneeded difficulties down the road. You must monitor the cash position as well to prevent this. Be sure to check your monetary situation before the new month begins. Verify the cash balance, cash receipts, and cash bills that were paid. Then, at the end of the month, make a note of it. You will receive a monthly financial analysis as a result of doing this.
Update Your Bookkeeping Software
Your bookkeeping procedure depends heavily on your bookkeeping software. You can perform excellent bookkeeping if you have competent bookkeeping software. So, it becomes crucial to monitor the bookkeeping software you employ. Verify that you have the most recent version of it and that it meets your bookkeeping requirements. If your present software is not appropriate for your bookkeeping needs, you must upgrade it and switch to another program.
Record Revenue and Expenses
Most people think this is a waste of time. As a result, they decide to skip this phase. But it’s one of the most crucial actions that needs to be taken. You can have a regular understanding of the company’s revenues and expenses by keeping track of the revenue generated and expenses incurred each month. Frequent awareness of your expenditures can assist you in identifying ways to cut back on certain unneeded costs. Similar to this, you could be able to come up with suggestions to aid in revenue expansion if you have information about the revenue made each month.
Review Customer and Vendor Invoices
Regardless of the type or size of the firm, invoices are an essential part of every finance management system. You should keep an eye on all business-related invoices, from both clients and vendors, as a business owner. This will enable you to more effectively plan out your monthly costs. To better understand the supply and demand dynamics in the industry, keep note of the months with the highest vendor bills and the lowest customer invoices.
Reconcile Your Records
Statements of bank reconciliation guarantee that business and banking activities are coordinated and are summarised. This aids companies in ensuring that the business entity hasn’t been used for any transactions that aren’t appropriate. The risk of fraud or financial abuse associated to business is decreased by carrying out this task every month. This suggests accurate books and effective transaction recording.
Sales Tax Returns
Every business must pay sales taxes. If you prepared and recorded your sales tax on a monthly basis, it would be simple and beneficial for your company. Trying to do a large amount of work on a quarterly or annual basis may result in mistakes or unnecessary problems later on. Hence, try filing your sales tax on a monthly basis to avoid hassles.
Review Your Inventory
The goods that a company keeps in stock are known as inventory. Together with finished goods, inventory also comprises goods in various stages of manufacture, raw materials needed, and goods that will be utilised to create things that the company will later sell. The foundation of the production process is inventory. As a result, it’s critical that you evaluate your company’s inventory each month to make sure there isn’t a shortfall.
Record Credit Cards Transactions
In general, all firms keep a complete record of their transactions. Yet, because they are credit-based transactions, credit card transactions should be reported separately. The business card may occasionally be used for private matters. Thus, if you’re not careful, you may accidentally mix up personal and business costs, which could lead to problems later on when the personal and corporate credit card transactions don’t match up, messing up your company’s accounts. In order to avoid more issues, it is best to separate your personal from commercial activities when you record your credit card transactions separately.
Review Debt Accounts
Every company has outstanding accounts both payable and receivable. These unpaid sums are only taken into account by business owners at the end of the year, which is too much labour. You can keep track of income that has yet to be collected and payments that have yet to be made by reviewing accounts payable and receivable reports each month. Also, you can schedule follow-up reminders for the receivable accounts. It’s crucial to keep track of business debt since it guarantees timely payment of business expenses on both the credit and debit sides.
Review WIP Reports
Work in Progress, or WIP, is a phrase. Companies could occasionally be unable to finish all of their monthly tasks. Certain tasks could go unfinished. As a result, each month as you close your monthly balances, you must review your ongoing projects and unmet monthly goals. You should try to include them on your list for the following month. This will assist you in making sure that you eventually reach all of the objectives you have set for your company.
This concludes the Monthly Bookkeeping Checklist. We hope you will use these instructions and do your best to put them into practise. Although each company operates in its own manner, these are some standard practises that anyone can use. We hope these can help you reduce your workload. Good luck with your bookkeeping!