The best time to start working on getting your books in order is not when it’s time to file your taxes.
Ideally you’ll have kept up on your bookkeeping throughout the year and when taxes come around your numbers are not a big deal. That’s always the best situation to be in.
So you might be thinking…
What bookkeeping tasks should be getting done every month?
We suggest a good place to start is by Creating a Monthly Bookkeeping Checklist. This is going to look different for every business and that’s why we take a personalized approach with each client we work with.
Here’s an example of a small business owner in their first year. This is a real example but we’ve changed the names for privacy. We’ll call it Best Online Shop and the owner we’ll call Shelly.
Shelly is an online reseller. She buys items online, locally or from wholesale suppliers and resells them on popular marketplaces such as Ebay and Amazon. She doesn’t have any employees. She has a business bank account and a business credit card. She’s done a good job of separating her business accounts from her personal accounts by setting those up. She’s off to a great start!
Shelly buys new inventory once a week, usually from one or two suppliers. She saves her receipts to an online folder. She pays her credit card off every month. She pays herself every week by check. Her deposits from her sales go into her Business checking account. She probably has about 20 transactions every month in total. Transactions include: deposits, purchases, fees, etc.
Shelly wants to know:
- Where her money is going.
- How much she should be paying herself.
- How much money she can reinvest into her business to grow it.
- How much money she should save for taxes.
By doing monthly bookkeeping Shelly is able to answer those questions every month. She knows how her business is doing and can adjust her goals and her spending accordingly.
Shelly knows paying her taxes are important and wants to make sure she’s saving enough to pay them at the end of the year. After her first year and talking to a tax professional she might even be paying her taxes quarterly but that’s not important at this stage and for what we’re talking about here.
Monthly Bookkeeping Services
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For Shelly every month she’ll want to do the following:
- Categorize her transactions. This lets her know where her money is going and how to write it off when tax season comes around.
- Make sure her accounts are reconciled. Make sure deposits went in for the right amount and that payments were made for the right amounts. This is where bookkeeping software makes life a lot easier. We match up all transactions with bank statements to make sure everything is accounted for.
- Run Profit and Loss Statement
- Run Balance Sheet
- Check all reports for accuracy
What Shelly needs and what you need could be very different. That’s why we love getting to know our clients and find out more about their businesses. Many things can play a factor in how to make sure your bookkeeping is managed correctly. Find out what account types to use to categorize your transactions so you always know how your money is working for you. Make sure you have the right software and right set up within that software that’s right for your business and bookkeeping needs.
If you haven’t already, give us a call to set up your FREE
Even if you don’t end up hiring us for your bookkeeping, we know you’ll learn a lot by the end of the call.