As a small business owner, managing day-to-day operations is challenging enough; keeping up with your books often gets pushed to the bottom of your to-do list. However, consistent monthly bookkeeping is not just a best practice; it’s a necessity for achieving financial clarity, ensuring smooth tax filing, and fostering long-term business growth.
This guide provides a clear and practical monthly bookkeeping checklist tailored for small to mid-sized businesses earning between $1 million and $15 million in annual revenue. Whether you’re using outsourced bookkeeping services, doing it yourself, or somewhere in between, this resource will help you stay ahead of financial issues and make informed decisions.
Why Monthly Bookkeeping Matters
Bookkeeping for small businesses isn’t just about staying compliant with the IRS; it’s about having a clear picture of your business’s health. Regular monthly bookkeeping:
- Helps you track profitability
- Improves cash flow management
- Prepares you for tax season
- Flag discrepancies or fraud early
- Supports business growth with accurate data
According to a QuickBooks study, 60% of small businesses believe they lack strong financial knowledge. A consistent monthly bookkeeping system gives you back control.
Who This Checklist Is For
This checklist is ideal for:
- Entrepreneurs doing their books
- Admin teams handling the finances part-time
- Companies using outsourced bookkeeping services
- Industries such as real estate, e-commerce, contracting, consulting, and more
If you’re using bookkeeping software like QuickBooks or Xero, the tasks below can often be automated or streamlined. If not, this list will still apply using spreadsheets and manual tracking.
The Monthly Bookkeeping Checklist
Use the table below as a quick-reference summary, followed by detailed steps:
| Task | Description | Responsible | Tools/Notes |
| Reconcile bank accounts | Match transactions with statements | Bookkeeper or owner | QuickBooks, bank statements |
| Categorize income & expenses | Assign transactions to the correct accounts | Bookkeeper | Accounting software |
| Review A/R and A/P | Check outstanding invoices & bills | Admin or bookkeeper | Invoicing tools |
| Record payroll & benefits | Log wages, taxes, and deductions | Payroll provider or internal | Gusto, ADP, or manual |
| Update fixed asset log | Add new equipment/purchases | Bookkeeper | Spreadsheet or software |
| Backup financial data | Ensure digital records are saved | IT/admin | Cloud storage, backups |
| Run key financial reports | Generate P&L, balance sheet, and cash flow | Bookkeeper or CFO | Accounting software |
| Review budget vs. actuals | Compare actuals to projections | Owner/CFO | Budgeting tool |
| Prepare for tax deadlines | File quarterly if needed | CPA/bookkeeper | IRS calendar |
| Clean up entries | Correct duplicates, errors, or miscategorization | Bookkeeper | Manual or software |
1. Reconcile Bank Accounts
Why it matters
Bank reconciliation ensures that your recorded financial transactions match the actual bank activity. Catching errors now avoids surprises later.
How to do it:
- Pull your monthly bank and credit card statements
- Use your bookkeeping software to match transactions
- Investigate discrepancies immediately
Tip
Most accounting tools, such as QuickBooks, enable automatic reconciliation with linked accounts.
2. Categorize Income and Expenses
Proper transaction categorization allows for accurate financial reporting and tax deductions. Whether you’re managing books for a law firm or a retail store, ensure every transaction is coded correctly.
Common categories include
- Advertising and marketing
- Office supplies
- Travel and meals
- Payroll and benefits
- Cost of goods sold (COGS)
Pro Tip
Utilize bookkeeping and accounting services to help you tailor categories to your specific industry.
3. Review Accounts Receivable and Payable
Keeping track of who owes you (A/R) and what you owe (A/P) is critical for cash flow management.
- Follow up on overdue invoices
- Set reminders for upcoming payments
- Use accounting software with A/R and A/P features
- Ensure vendors are paid on time to maintain good relationships
If managing these manually, consider outsourced bookkeeping for accuracy and speed.
4. Record Payroll and Employee Benefits
Whether you manage payroll internally or use a service like Gusto or ADP, you need to:
- Record gross pay, taxes, and deductions
- Allocate payroll by department or cost center if needed
- Track benefit expenses (health insurance, 401k contributions)
If you’re unsure about how to manage payroll effectively, a payroll services provider can handle compliance, reporting, and record-keeping tasks.
5. Update Fixed Asset and Depreciation Records
Bought new office furniture, vehicles, or tech equipment? Update your asset log and calculate depreciation on a monthly basis. This ensures accurate financial forecasting and tax compliance.
- Log purchase date, cost, and estimated useful life
- Apply IRS depreciation methods (MACRS is common)
- Use spreadsheets or asset-tracking software
6. Backup Financial Records
Digital backups safeguard your data in the event of system failure, theft, or natural disaster.
- Schedule automatic backups of QuickBooks or accounting software
- Save reports and ledgers to secure cloud storage
- Retain at least 7 years of records to remain IRS compliant
Cybersecurity best practices apply, even to small businesses.
7. Run Key Financial Reports
These monthly reports help you understand your financial position and make strategic decisions:
| Report | Purpose |
| Profit & Loss Statement | Shows revenue vs. expenses |
| Balance Sheet | Snapshot of assets, liabilities, and equity |
| Cash Flow Statement | Tracks inflows and outflows of cash |
| Budget vs. Actual | Compared to the forecast and the real performance |
Understanding your profit and loss statements helps you identify trends and adjust your spending accordingly.
8. Compare Budget vs. Actuals
A monthly financial review isn’t complete without comparing your actual numbers against your planned budget. This can help you:
- Identify cost overruns
- Adjust forecasts
- Make informed business decisions.
Budgeting is crucial for startups, freelancers, and consultants who need to monitor their runway or variable income.
9. Prepare for Tax Deadlines
Depending on your entity type, you may be required to pay quarterly estimated taxes. Monthly bookkeeping ensures you’re ready.
To stay compliant
- Track deductible expenses
- File estimated taxes (1040-ES or 1120-W)
- Keep sales tax filings up to date if applicable.
PL Consulting also offers tax and accounting services to simplify compliance.
10. Clean Up Transactions
Clean books lead to clean reports. At the end of each month:
- Fix miscategorized items
- Remove duplicates
- Attach receipts or memos to the necessary entry.
- Flag anything unusual to investigate
A QuickBooks clean-up service can help you reset your books if they’ve fallen behind or become messy.
Industry-Specific Bookkeeping Tips
Different industries need different attention in bookkeeping. Here are a few:
| Industry | Key Bookkeeping Focus |
| Real Estate | Track commissions, escrow, and depreciation |
| Contractors | Job costing, equipment rentals, and labor tracking |
| E-Commerce | Inventory, payment processor fees, returns |
| Law Firms | Trust accounting, retainers, and billable hours |
| Non-Profits | Grant tracking, fund accounting |
| Freelancers & VAs | Mileage logs, project-based income |
Working with a provider that specializes in bookkeeping for consultants, freelancers, or non-profits ensures you’re following industry standards.
Tools to Simplify Monthly Bookkeeping
If you’re still using spreadsheets, consider upgrading to tools designed to make bookkeeping easier:
QuickBooks Online
Ideal for most small businesses
Xero
Streamlined, cloud-based software
FreshBooks
Great for freelancers and service providers
Gusto
Payroll processing
Dext
Receipt scanning and expense tracking
PL Consulting
Custom support and monthly services
Outsourced bookkeeping services for startups and growing companies can eliminate the guesswork associated with managing finances.
Build the Habit, Reap the Benefits
Consistency is the key to success with bookkeeping. By implementing a reliable monthly checklist, you can:
- Reduce tax-time stress
- Make data-driven decisions
- Improve profitability
- Gain investor and lender trust
- Keep your business growth on track.
If you find yourself overwhelmed or unsure where to begin, PL Consulting can help. Our team provides monthly bookkeeping services, tax compliance services, and financial reporting tailored to meet your specific needs.
Take Control of Your Business Finances Today
Ready to simplify your monthly bookkeeping and gain financial clarity? Whether you’re a startup, a growing business, or an established company, PL Consulting offers personalized support, transparent reporting, and long-term strategy.
Explore our bookkeeping services now at https://plcfo.com.
Let’s make your numbers work for you, not against you.