“I’ll deal with this later,” is a pretty common way small business owners approach bookkeeping. It’s daunting. So I made you a checklist you can use to help you get started and cover the basics without burning yourself out.

What should be included in a monthly bookkeeping checklist?

Each month, you’re really doing three things: reviewing your transactions, reconciling your accounts, and checking your reports to make sure everything makes sense.

A monthly bookkeeping checklist is what keeps you from falling behind and wondering where your money went at the end of the month. 

Here’s what that actually looks like each month:

• Review and categorize all transactions
• Reconcile bank and credit card accounts.
• Reconcile the operating account last to ensure accuracy.
• Review your Profit & Loss and Balance Sheet
• Follow up on outstanding invoices
• Scan expenses for anything unusual

These are the things that keep your books in good shape and your numbers something you can actually trust.

How do you review and categorize transactions?

Go through each transaction in QuickBooks and make sure you categorized them the way it actually happened in real life.

For example:

• You record a client payment as income, but you should split it between income and sales tax collected.
• A credit card payment shows up, and you categorize it as an expense instead of a transfer. You enter a credit card payment as an expense instead of recording it as a transfer.  A credit card payment is a separate step, or it can be a transfer.
• You record a large purchase as a regular expense when you should track it differently.

When something doesn’t look familiar, pause and check it.  It takes a little extra time in the moment, but it saves you from staring at a report later and wondering what you’re looking at.

How do you reconcile your accounts each month?

Reconciling is just a word for making sure what’s in QuickBooks matches your bank and credit card statements. That should be at the top of your monthly bookkeeping checklist.

If your bank statement ending balance is $18,275, your QuickBooks balance should match that after reconciliation.  The amounts will match at reconciliation but may not match in the check register.  There are always transactions that are in the register that may not have cleared the bank yet.

Let’s say you’re off by a few hundred dollars. It could be:

1. A transaction downloaded twice
2. A payment cleared the bank, but never made it into QuickBooks
3. A deposit was recorded for the wrong amount or a transposed number

It can be tempting to force the numbers to match just to move on. Don’t. 

There’s always a reason the numbers don’t match, and once you find it, everything usually falls into place.

What reports should you look at every month?

Take a few minutes each month to look at your Profit & Loss and Balance Sheet so you can see how things are actually going.

In QuickBooks Online, go to the Reports tab on the left-hand menu.

Start with the Profit & Loss:

• Does your income line up with what you expected?
• Are any expenses higher than usual?

Then open the Balance Sheet, also found in the Reports section:

Do your bank balances match your actual accounts?

Are there accounts you don’t recognize or haven’t reviewed recently?

You can also “favorite” both reports in QuickBooks so they’re easier to find each month.

You’re looking for anything that doesn’t make sense. This is the place where problems usually show up first.

Overlooked tasks in your monthly bookkeeping checklist

This is the part most checklists leave out, and it’s usually where I find the biggest issues.

These are the tasks I do regularly when reviewing clients’ books:

1. Owner’s pay and distributions: These easily blend into your expenses
2. Sales tax tracking: If you collect Washington sales tax, confirm it’s being recorded and set aside 
3. Loan and credit card payments: Are payments split correctly between principal and interest?
4. Uncategorized transactions: These tend to build up quickly, so check this every time
5. Subscriptions and recurring charges: Look for tools you signed up for and forgot about
6. Watch for handwritten checks you may not have entered in QuickBooks, and for missing check numbers.

I’m always finding multiple subscriptions for the same type of software in my clients’ accounts. They sign up for a tool, try another one, and end up paying for both without realizing it. A quick monthly review catches money leaks like that.

How do you keep this from piling up again?

The only way this works is if you actually put time on your calendar for it. Even an hour a month is enough if you stay consistent.

It doesn’t have to be a long, drawn-out, complicated process. It just has to happen regularly.

Note: This blog article is for informational purposes only and should not be considered legal, financial, or tax advice. Please consult a qualified professional for personalized advice tailored to your business needs.