Running a small business is exciting, but managing your books? That’s where many small business owners start to feel overwhelmed. If you’re new to bookkeeping, it can feel like one big puzzle, full of receipts, expenses, and payments that just don’t seem to make sense. But don’t worry! Managing your finances doesn’t have to be stressful.
With the right approach, you can take control of your bookkeeping and even make it part of your routine. One of the easiest ways to do this is to set up a monthly bookkeeping checklist. This simple guide will walk you through all the essential tasks you need to complete each month, so you can stay on top of your finances, avoid headaches, and feel more confident about your business’s money matters.
Let’s dive in!
Your Monthly Bookkeeping Checklist
1. Check Your Bank Account
Task: Look at your business bank account and compare it to your records.
Why It’s Important: This step helps you catch any errors, missed payments, or extra charges that you might not have noticed.
How to Do It: Start by pulling up your business’s bank account statement. Then, open your bookkeeping records, whether you’re using a simple spreadsheet or bookkeeping software. Compare each transaction on your bank statement to what you’ve recorded. Make sure everything matches up, and note any differences.
Mistakes can happen, especially when you’re dealing with lots of small expenses. This monthly review helps you make sure your records are accurate and up to date. Plus, if you catch a mistake early, it’s a lot easier to fix!
2. Write Down All Your Income
Task: Record all the money your business earned during the month.
Why It’s Important: Knowing exactly how much money is coming into your business is key to planning for expenses, growth, and taxes.
How to Do It: Go through all your sales, invoices, or income sources, and write down each amount in your bookkeeping system. Make sure you include every payment, even the small ones. This will give you a full picture of your business’s financial health.
Recording your income regularly also helps you prepare for tax season and gives you a clearer understanding of how your business is performing month-to-month.
3. List All Your Expenses
Task: Write down everything you spent money on for your business.
Why It’s Important: Keeping track of your expenses lets you see where your money is going, which helps with budgeting and tax deductions.
How to Do It: Every month, go through your receipts, invoices, and bank statements to capture all your business-related expenses. Common categories might include office supplies, rent, utilities, marketing, or travel. By sorting your expenses into categories, you can easily see where your business is spending the most.
Having this information at your fingertips also makes it easier to spot areas where you can cut costs or make adjustments to stay within your budget.
4. Save and Organise Your Receipts
Task: Make sure you have all the receipts for your business purchases.
Why It’s Important: Receipts are proof of your business expenses, which you’ll need for tax purposes. Plus, keeping them organised can save you a lot of time and stress later.
How to Do It: If you’re dealing with paper receipts, set up a simple folder or box to store them in. If you prefer going digital, use a scanning app on your phone to take photos of your receipts and save them in the cloud. Many apps will even organise your receipts by date or category, making them easier to find later.
Having an organised receipt system means you won’t have to scramble when tax season rolls around—and you’ll be ready to claim every deduction you’re entitled to!
5. Pay Any Outstanding Bills
Task: Review any unpaid bills or invoices and pay them on time.
Why It’s Important: Paying your bills promptly helps you avoid late fees and keeps your suppliers and service providers happy.
How to Do It: Each month, make a list of any bills that are due. This might include things like rent, utilities, supplier invoices, or software subscriptions. Once you know what you owe, make sure you’ve set aside enough money to cover these expenses and pay them before the due date.
Setting up reminders, either in your calendar or through a bookkeeping app, can help you stay on top of payment deadlines and keep your business running smoothly.
6. Set Aside Money for Taxes
Task: Put a portion of your income into a separate account for taxes.
Why It’s Important: Setting money aside each month for taxes prevents you from facing a large, unexpected tax bill later in the year.
How to Do It: Depending on your tax rate and local regulations, aim to set aside a percentage of your monthly income for taxes. Many business owners aim to save around 20-30% of their income, but you can adjust this based on your business and the advice of a tax professional.
By doing this monthly, you’ll have a comfortable cushion when it’s time to file your taxes, and you won’t be scrambling to come up with the money all at once.
7. Reconcile Your Records
Task: Double-check that your bookkeeping records match your bank account and receipts.
Why It’s Important: Reconciling your records ensures everything is accurate and up to date, helping you avoid mistakes.
How to Do It: Take your bank statement and compare it to your bookkeeping records. Make sure all transactions match. If there’s a charge on your bank account that you forgot to record, add it to your books. If you notice anything odd, like duplicate entries or missing amounts, fix them.
Reconciling your records regularly helps you catch small mistakes before they turn into bigger issues and gives you a clearer picture of your financial health.
8. Review Your Cash Flow
Task: Look at how much money you have left after paying expenses.
Why It’s Important: Understanding your cash flow helps you see whether your business is making or losing money.
How to Do It: After recording your income and expenses, look at your cash flow, and the money that’s left over. Are you spending more than you’re earning? Or are you consistently bringing in more money than you need to cover your expenses?
Knowing your cash flow helps you make smart financial decisions. If you’re in the positive, you can plan for future growth. If cash flow is tight, you’ll know to cut back on expenses or find ways to increase revenue.
9. Save for Emergencies
Task: Put away a little extra money for unexpected costs.
Why It’s Important: Building an emergency fund gives you peace of mind and helps you handle financial surprises without disrupting your business.
How to Do It: Each month, set aside a small percentage of your income into a separate savings account. It doesn’t have to be a lot, even a small amount can add up over time. This emergency fund can cover things like equipment repairs, slow sales periods, or other unexpected costs.
Having some savings to fall back on means you won’t need to stress when surprises come your way.
10. Back Up Your Records
Task: Ensure your financial records are saved in a safe place.
Why It’s Important: If something happens to your computer or physical files, you don’t want to lose all your financial data.
How to Do It: If you’re using bookkeeping software, make sure it’s automatically backing up to the cloud. If you’re keeping paper records, scan important documents and store them digitally. And if you’re using a spreadsheet, save copies to a cloud service like Google Drive or Dropbox.
Backing up your records keeps your business’s financial information safe, so you can always access it when needed.
Streamline Your Bookkeeping with Confidence
Bookkeeping doesn’t have to be a chore! It can be a smooth, manageable part of your business routine with the right tools and mindset. By following this monthly checklist, you’ll stay in control of your finances and keep your business running efficiently. But if the thought of tracking receipts and reconciling accounts still feels overwhelming, there’s a simpler way.
At Strive Business Limited, we help small business owners like you take the stress out of bookkeeping with smart solutions like Dext Prepare. With Dext, you can snap a picture of your receipts, and it will automatically organise, categorise, and sync with your bookkeeping system, saving you time and reducing the risk of error.
Want to make bookkeeping easier? Reach out to us today to learn how Dext Prepare, combined with our expert services, can streamline your financial processes. Let us handle the bookkeeping, so you can focus on growing your business with confidence.
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