25 Jul

Month-End close checklist for bookkeepers


monthly bookkeeping checklist

This is another time I recommend you make use of a financial consultant who can help you set your financial road-map for the following year. Review your revenue, cost of sales, gross profit and expenses and compare them to your budget and projections. Make necessary changes to make sure you meet your goals during the next quarter. Small Business Administration to make sure you are meeting your state tax obligations. Be sure to review your cash balance and the health of your cash flow.

monthly bookkeeping checklist

Without further ado, here are the five things you need to check off monthly to stay on top of your bookkeeping. Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images. An open vendor deposit is money your business has sent to a vendor, but the vendor hasn’t sent you a vendor invoice to use that money.

steps for accurate and organized bookkeeping

Or if an employee submits fraudulent expenses that generate a material loss for your business. Weekly trips are a decent frequency to help you keep your cash flow healthy and records updated with any paper checks and cash payments. Also, remember to verify if the checks cleared before you spend any more money or pay out any more bills. The Income summary then closes out to retained earnings and dividends closes out to retained earnings. Certain accounts must be closed out before preparing the monthly financial statements to reflect the company’s true financial status. The temporary accounts need to be closed out so that the next period can start from zero.

You may need to review your forecasts if your financial statements exceed or don’t meet your budget. If you don’t have a budget, comparing your current income to previous months can be a good way to prepare for the future. This document reports the amount of income taxes, social security tax, and Medicare tax withheld from the employee’s paychecks. If you’re not sure how to fill out the form, don’t sweat it; this is something your payroll provider can easily assist you with. When your bookkeeping and procurement procedures are organized and efficient, tasks can be completed more quickly and with fewer errors. This allows employees to focus their time and energy on other important aspects of the business.

Open Client Deposit Report

Your fixed assets are long-term items that add value to your business. Things like buildings, equipment, furniture, vehicles, and land are considered fixed assets. Before we get started we want to be sure that we have entered all of the transactions for the prior month. The IRS has a February 1 deadline that requires you to report the annual earnings of your full time employees (W-2s) and independent contractors (1099s). That means that by February 1 you must have already mailed copies of the tax forms to the people who worked for you. Your deadline for filing with the IRS is no later than February 28.

  • Follow these checklists and your bookkeeping will become an organized process, saving you time and leaving you with books that accurately portray the financial health of your practice.
  • Ask your vendor to fill that order and send an invoice for the purchase order so you can move the money from your asset account into COGS (Cost of Goods Sold).
  • Before you close out your books for the year, double check that all your financials are in order.
  • By following this month-end bookkeeping checklist, you can maintain accurate financial records and gain valuable insights into your business’s financial health.
  • You might decide to use cheaper materials to produce the product.
  • All forms and contract samples are carefully sorted and categorized so that any document can be easily located whenever a user searches for it.
  • Establish a closing date by which all expenses and income must be posted.

That way, you’re not scrambling at month-end looking for documents. One way to stay organized is by using basic accounting software to track your transactions and store your reports. Staying up to date with sending invoices helps both your business https://dodbuzz.com/running-law-firm-bookkeeping/ and your customers. While sending invoices in a quick fashion reminds clients of your services, this also promotes quicker payment. While maintaining a scheduled flow of preparing and sending them, keep the status of any outstanding invoices.

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A bookkeeping checklist allows bookkeepers to track their various bookkeeping assignments, whether on a day-to-day basis, weekly, or monthly. These bookkeeping tasks usually consist of entering sales invoices, purchase invoices, petty cash receipts, bank receipts, and cheque payments. This also includes other financial statements, such as running balance sheets and profit and loss statements. Before moving on to anything else, you need to review the accuracy of your business cash and credit transactions in order to work with your exact cash position.

A checklist makes sure nothing falls through the cracks and keeps you organized and efficient so you can focus on other aspects of your business. It also ensures that you are meeting all of your financial responsibilities and deadlines. Missed deadlines can be a costly mistake resulting in some hefty fines and penalties.

Building Better Businesses

These include income statements for the month compared to the prior month, prior year, and budget, as well as the balance sheet and fund balances. Closing the books at the end of the period is essential to transfer the “temporary” income and expenses accounts to retained earnings. This may be done monthly or annually, so this may or may not be part of your monthly tasks. Having accurate financial statements and source documentation will save your clients money when they pass over to their CPA at tax-filing time.

monthly bookkeeping checklist

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