Avoid tax headaches and monitor your business growth with this monthly bookkeeping checklist.
Make sure you’re addressing these monthly accounting tasks to avoid bookkeeping errors and maximize your company’s potential growth.
- Balance the books
“The review and reconciliation of all bank and credit card accounts should be number one on the list of tasks business owners need to keep up with on a monthly basis,” says NFIB member Steven J. Weil, Ph.D., president of RMS Accounting in Fort Lauderdale, Florida.
Weil says the automation of check processing and the prevalence of auto debit have made it easy for businesses to lose hundreds or even thousands of dollars a year if they aren’t monitoring accounts for inconsistences. If you regularly use credit cards in business transactions, this process should be repeated for credit accounts, he says.
This is also a good time to review credit card payments to ensure that every batch has been deposited into your bank account, Weil says. “Processing problems can and do occur, leaving your money on hold at the credit card processing center and not in your bank account.”
- Review profit margins
Each month, compare profit margins and losses to the prior year to analyze growth and address downturns. “The value of maintaining good books is that you can use them to track profit margins and expenses so that you know if there is a problem in your business sooner rather than later,” Weil says.
- Track down missing payments
Review accounts receivable every month to resolve outstanding invoices. “Keep a close eye on accounts receivable,” Weil says. “Business failure is [often] due to bad receivables and lack of control on credit extended as opposed to the lack of sales. Never let a customer owe you more than you can afford to lose.”
- Process and review payroll
Payroll processing includes payroll tax withholding, reporting and depositing income tax, and other tax-related payments. Payroll services can manage these processes for you for a fee. For large or growing companies, this might be a worthwhile investment to avoid headaches at tax time.
- Check in with your accountant
Conversations with your accountant shouldn’t be reserved for tax season. Open communication with your accountant ensures that he or she will know the ins and outs of your business throughout the year, which will result in better service.
Check in with your accountant monthly or quarterly to ensure that he or she has the information he or she needs to best serve your business. “Get help from someone who understands your business, its profit margins, and normal expenses,” Weil says. “Make sure that what you are doing provides good information that helps you manage and understand your business, not just something you can use at tax time.”