Month End Close Process: Importance, Checklist & Best Practices

monthly bookkeeping checklist

This can be done by reviewing your statements to flag any suspicious credits, debits, canceled transactions, or double charges. Once you have thoroughly examined your monthly bank and credit statements and are confident in its accuracy, you can complete the rest of your monthly bookkeeping tasks. Our monthly bookkeeping checklist template was carefully created to include all the necessary steps needed to accurately complete the monthly bookkeeping process for your clients. You can also customize it to fit your firm’s needs and share it with your team members. Small business owners who recently opened their doors may feel inexperienced with the operational tasks involving bookkeeping.

monthly bookkeeping checklist

Accounting software can help you with built-in inventory management tools and automation for creating purchase orders. If a worker is making purchases for the business, make sure they communicate it to the person in charge so the transaction can be recorded properly. A cloud-based solution that makes it easy for accounting firms to manage client work, collaborate with staff, and hit their deadlines.

Step 7 – Reconcile Your Prepaid and Accrued Accounts

Edit the list of account descriptions and codes to match your business accounts. The template includes space to record trial balance, adjusting entries, adjusted trial balance, income statement and balance sheet for each account. This is the process of comparing your income and expense records with your bank statements and making sure they match. This is important to ensure there aren’t any missing transactions or inconsistencies.

monthly bookkeeping checklist

To avoid mistakes, review your financial information before the month-end close. Ask someone who didn’t prepare the accounts to review them so they’ll find errors or problems you didn’t notice. Once you’ve prepared your financial reports, show them to a CPA. They can analyze your numbers and give you insights to make good business decisions. If you have accounting software, you can generate these reports easily and avoid a ton of manual work. If you’re fighting for time, aim to catch up with your reconciliation ahead of the month end close process.

What is Bookkeeping?

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

Without having this initial step thoroughly checked for accuracy and completion, you risk making mistakes in subsequent monthly bookkeeping tasks. We take monthly bookkeeping off your plate and deliver you your monthly bookkeeping checklist financial statements by the 15th or 20th of each month. Similar to reconciling bank transactions, this process involves comparing credit card statements against transactions listed in your general ledger.

Cash Flow Statement Template

So make sure your financials are accurate before closing the accounting period. Your accounts payable only captures short-term payables to creditors. Reconciling accrued expenses will help you stay on top of all invoice payments and dues within a year.

  • If I run into any snags or problems that will take me longer, then I can still know on average the time that it will take me to do any given task.
  • You can also gain insights into your revenue and spending habits.
  • Bank reconciliations will also help you understand your cash situation and not overdraw your account.
  • Similar to reconciling bank transactions, this process involves comparing credit card statements against transactions listed in your general ledger.

With account reconciliations, you’ll spot mistakes in your financial data and fraudulent transactions (if any!). You must save in the bookkeeping checklist in the folder of the computer itself or in the print-out form. Similar to the Open Client Deposit report, this report shows vendor deposits on project and inventory purchase orders that have not yet been applied to an invoice.

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