6 Key Monthly Bookkeeping Tasks

Okay, so bookkeeping might not seem like the most glamorous task to add to the list of things that every small business owner should do, but it’s essential to stay on top of your business finances. Here are my top 6 monthly bookkeeping tasks. 

Check your bank balance 

Checking your bank balance might not seem like a bookkeeping task, but it is vital and should be done at least once a week, preferably every day.  Nowadays, you can easily access your bank balance and review recent transactions from an app on your phone. You can link your bank account to the software using bookkeeping software such as QuickBooks or SageOne.  Each time you are in the office, you can log in and get it to upload the previous day(s) transactions into your accounts.  This allows you to check your balance and to analyse the transactions in one step. This step could be outsourced to your bookkeeper or admin assistant, as they don’t gain access to your bank account. 

File your records 

Saving your invoices and receipts can be done electronically, scanning any documents you receive in a paper format.  Some online accounting software allows you to attach your electronic invoice/receipt to the transaction within the software itself.  Alternatively, you can save the files to folders on your computer in month order, ensuring that the folders are adequately backed up.  Backing up to the cloud, using services such as Dropbox is a good and relatively cheap solution. 

Recording transactions 

Using software makes life easy, especially if you use the software to download your bank transactions automatically.  If you aren’t using software, then you still need to have a method of summarising your monthly sales and expenses.  You can do this by using a simple spreadsheet or book-keeping journal.  This task can often be outsourced to a bookkeeper, accountant or admin assistant.  The key is to ensure that this bookkeeping task is kept up to date so that it doesn’t become too onerous and time-consuming. 

Profits and Tax 

Calculate your monthly profit so you know how well you are doing, and calculate how much money you should be saving in a separate bank account for your tax liability.  In simple terms, your profit is calculated as Revenue minus Expenses. 

Review your financial performance 

If you use the services of an accountant, then they might be able to provide some insight into your figures as part of the package they offer.  Otherwise, you should review your income, expenses, profit and cash flow. Examining the figures will help you highlight what’s working and what isn’t and help you make any necessary changes. 

Plan for the next month 

Business budgeting and planning should be fluid and updated monthly for any new information that come to light during the review of your past month’s financial performance.  For example, this could be diverting the marketing budget to an area that is doing well, but you need to increase sales.