If you’re new to bookkeeping checklists, this is a great place to start your journey toward being more efficient. If you already have a checklist going, then you’ll surely find some gems to add to it below.

Here are the most important monthly bookkeeping tasks to add to your bookkeeping checklist. Considering everything at once can be overwhelming and discouraging. That’s why this guide will be in two parts.

In summary, here’s the first half:

1. Check for updates to your bookkeeping software.
2. Run profit and loss statements, then assess.
3. Search your budget for needed changes.
4. Send out payroll and make records.
5. Confirm your invoices from customers and vendors.

Let’s jump into it with the easiest step.

#1: Check For Updates To Your Bookkeeping Software

This is a double entendre. Yes, you should ensure you’re using the latest version of QuickBooks, Xero, FreshBooks, or whichever bookkeeping program that’s best for you.

It may seem like a small thing, but if you take a look at the update logs for each program, you’ll see how many bugs are removed with every iteration and how many new features are added to save you time. Quickly checking for updates takes two minutes but can save you hours of stress.

The second thing you should update is the aspects of your monthly finances.

For example, imagine you’ve just added on-demand pay for your employees, plus you introduced a new discount for all longtime clients. You’d need to double-check whether those systems are implemented in every step of your financial tracking. This will save you from the monumental backtracking involved in forgetting something that has a widespread effect on your balance sheet.

As a bonus, you’ll get more useful reports when every aspect of your business is recorded and categorized in a way that accurately reflects reality.

#2: Run Profit And Loss Statements, Then Assess

If you’re using accounting software, you can likely create a profit and loss statement in five seconds flat. Use a monthly statement to evaluate how your business performed. The following questions are like a diving board:

1. Where did you make most of your money?
2. Which expenses drained more than you’re comfortable with?
3. Has your financial position changed much since last month?
4. Are you closer to your business goals?

Then, start asking other questions based on what you’re interested in.

Finally, give yourself a refresher on long-term figures. This could be year-to-date or the previous fiscal year. With all things considered, are you on track? Do you need to adjust your tactics?

This big-picture knowledge gives you the power to control your business deftly, pivoting and pacing yourself to make the most of any circumstance.

If you’re unsure about your strategies or how to interpret your numbers, contact us for an assessment of how your business has been doing compared to your competitors, industry trends, and the economic climate. Of course, you’ll also get a comprehensive game plan to improve even more.

#3: Search Your Budget For Needed Changes

People know they should do this. Then, they skip it. If you ever feel like you don’t have time to review your budget this month, pause and think back to when your cash flow was cripplingly tight. That was avoidable with the right monthly budget adjustments.

Every month, review how much cash you actually needed on hand. Make at least that much available for the month to come. What plans do you have for the coming month? How much cash will you need for that? Set that aside, plus some extra. If your business has seasonal peaks and valleys in demand, this is even more important.

Above all, remember that you’re avoiding emergencies and complications that come from your cash flow running dry. Don’t cheap out on the allowance, then realize you need more — it’s much easier to set aside money, then later find out you have leftovers.

Lastly, take a look at your expenses. A lot has changed since last month. Are there any expenses that were paid despite not being helpful, such as unused subscriptions or an excess of contractors? Are there any expenses you could cut down on for the foreseeable future? The earlier you identify these opportunities, the more money you save — which means more room for business operations and more profit.

#4: Send Out Payroll And Make Records

Paying your employees is something you can’t afford to forget. That means you’ll have to run payroll at least once a month, if not more often. But payroll shouldn’t be a hassle. You have various software options to wrap up this task within a couple of minutes.

However, double-check whether:

1. The data is accurately recorded, including exceptions and last-minute changes.
2. You’ll be able to retrieve the documentation when you’re audited years from now.

If you need to brush up on which documents are important, start with the video below.

#5: Confirm Your Invoices From Customers And Vendors

It’s common sense that as soon as you receive a payment from a customer, you should immediately record it in your bookkeeping software.

On the other hand, sometimes we forget, or we’re up to our ears in urgent matters, or we receive a digital payment at midnight. Basically, there are good reasons to confirm which invoices have or haven’t been paid this month. Better yet, use bookkeeping software to automate your invoices and set up notifications for when an invoice is paid or late.

Either way, you avoid annoying customers by asking for payments they’ve already submitted. And for those who haven’t paid their dues yet, the end of the month is a good time to remind them about it. Note any accounts receivables that have been outstanding for several months. Going forward, at the end of each month, contact everyone on the list who hasn’t paid their debt yet.

Speaking of settling debts, you’re not off the hook either. Go through the invoices you received from your vendors and service providers. If there are outstanding amounts, pay them — or contact someone directly to explain when they can expect the money. This is one way to salvage the strength of your business relationships, which heavily affect your success.

Lastly, cross-check your financial programs in case of invoicing typos, incorrect transactions, or duplicates.

You’ve Made It Halfway To Keeping Your Business In Peak Performance Every Single Month

Give yourself a pat on the back; you deserve it. By following the steps above, you’ll be confident of the highest accuracy and effectiveness from your:

1. Bookkeeping software.
2. Profit and loss statements.
3. Budget strategy.
4. Payroll.
5. Invoices.

After putting in this effort, you will see your business improve. What’s next? Well first, have a snack, stretch, and relax a bit. Then, continue with part two of this guide to completely optimize your finances every month.

If you’ve gotten stuck on a step or want more clarification, contact us for a free consultation with an expert accountant. We’ll listen to your situation and priorities before giving actionable advice.

Without further ado, here’s part two of the monthly bookkeeping checklist.