What tasks are included in monthly bookkeeping?
Monthly bookkeeping is the backbone of any healthy business. While it may seem like a routine task, monthly bookkeeping involves more than just categorizing expenses. It’s a systematic process that ensures your business stays financially organized, tax-ready, and positioned for growth.
Download Our Free Brochure →So, what exactly does a bookkeeper do every month? Here’s a breakdown of the core tasks included in a monthly bookkeeping cycle:
1. Transaction Categorization
Every income and expense needs to be categorized correctly within your accounting software. This is the first step in producing accurate financial statements.
Bookkeepers:
- Review downloaded transactions from bank and credit card feeds
- Tag expenses and revenue to appropriate accounts (e.g., utilities, sales, rent)
- Reclassify anything that was incorrectly posted or auto-tagged
2. Bank and Credit Card Reconciliation
Reconciling your accounts means matching internal records to external bank and credit card statements to ensure nothing is missing or duplicated.
Tasks include:
- Comparing statement balances to your books
- Identifying and resolving discrepancies
Flagging unauthorized transactions or bank errors
3. Reviewing Accounts Payable and Receivable
Bookkeepers ensure that all customer payments are recorded and vendor bills are tracked properly.
- Confirm that invoices issued have been paid
- Track outstanding receivables
- Log vendor payments and upcoming liabilities
This keeps your cash flow in check and helps you avoid late fees or missed payments.
Download Our Free Brochure →4. Posting Journal Entries
Bookkeepers may post recurring journal entries such as:
- Payroll journal entries (if payroll is outsourced)
- Prepaid expense amortization
Monthly depreciation (if applicable)
5. Running Monthly Financial Reports
The real value of monthly bookkeeping comes from timely financial reporting.
Standard monthly reports include:
- Profit and Loss Statement (Income Statement)
- Balance Sheet
- Cash Flow Report
- AR & AP Aging Summary (optional)
These reports give you insight into how your business is performing month-to-month.
6. Month-End Review & Notes
At the close of each month, a bookkeeper may:
- Highlight irregularities or red flags
- Notify business owners of large variances
- Leave notes in the ledger for your CPA or tax preparer
This improves collaboration and avoids confusion during tax season.
Want help catching up on old months? Check out our Catch-Up Bookkeeping Services
FAQs
Do I need monthly bookkeeping if I don’t have many transactions?
Yes. Even if volume is low, monthly bookkeeping keeps you tax-ready, reconciled, and audit-safe.
How long does monthly bookkeeping take?
A small business typically requires 2–5 hours/month, depending on volume and complexity.
Is monthly bookkeeping enough for tax filing?
Yes, if it’s accurate. A good monthly bookkeeping process makes year-end tax prep seamless.
What happens if I skip a month?
Skipping months leads to data gaps, missed expenses, and possible IRS penalties. It also makes catching up harder and more expensive.
Can I do this myself using QuickBooks or Xero?
Yes, but only if you’re trained. DIY bookkeeping often results in misclassification and delays—especially when scaling.
Need help managing your monthly books?
CPA-ready reports
Reconciled every month
No contracts
