# Small Business Bookkeeping Monthly Checklist

**Purpose:** This checklist guides small‑business owners and bookkeepers through the essential bookkeeping tasks that must be completed each month. Follow it step‑by‑step to keep your financial records accurate, stay compliant, and make informed decisions.

---

## 1️⃣ Record Transactions & Reconcile Accounts  
- [ ] Enter all sales invoices and receipts into the accounting software.  
- [ ] Record all expense receipts, bills, and credit‑card purchases.  
- [ ] Post bank deposits and cash receipts.  
- [ ] Reconcile each bank account (checking, savings, credit cards) to the statement.  
- [ ] Match and clear outstanding checks and ACH payments.  
- [ ] Verify that payroll liabilities (taxes, benefits) are posted correctly.  
- [ ] Review and correct any duplicate or missing entries.  
> 💡 **Tip:** Use the “bank feed” feature (if available) to import transactions automatically and reduce manual entry errors.

---

## 2️⃣ Review Income & Expenses  
- [ ] Generate a month‑end Income Statement (Profit & Loss).  
- [ ] Compare actual revenue vs. budgeted/forecasted revenue.  
- [ ] Categorize any uncoded expenses and assign them to the proper accounts.  
- [ ] Identify and flag any unusually high or unexpected expenses.  
- [ ] Verify cost‑of‑goods‑sold (COGS) entries for inventory‑based businesses.  
- [ ] Update expense allocations for shared costs (e.g., rent, utilities).  
> 💡 **Tip:** Highlight variances >10% and investigate the root cause before month‑end closes.

---

## 3️⃣ Manage Accounts Payable & Receivable  
- [ ] Review open invoices and send reminders for any past‑due customer balances.  
- [ ] Confirm that all vendor bills have been entered and scheduled for payment.  
- [ ] Process scheduled payments (ACH, checks, online) before due dates to avoid late fees.  
- [ ] Record any early‑payment discounts taken.  
- [ ] Reconcile the Accounts Payable aging report.  
- [ ] Reconcile the Accounts Receivable aging report.  
- [ ] Update the cash‑flow forecast with expected inflows/outflows.  
> 💡 **Tip:** Set up automatic email reminders for customers with 30‑day and 60‑day aging thresholds.

---

## 4️⃣ Payroll & Tax Compliance  
- [ ] Verify payroll run for the month (hours, rates, overtime).  
- [ ] Ensure all payroll taxes (federal, state, local) are calculated and recorded.  
- [ ] Submit quarterly payroll tax deposits (if due) and file any required forms.  
- [ ] Issue and file employee W‑2s (year‑end) and contractor 1099‑NECs (as applicable).  
- [ ] Reconcile payroll liability accounts to the latest statements.  
- [ ] Update any changes to employee benefits, deductions, or wage rates.  
> 💡 **Tip:** Keep a “payroll checklist” folder in your cloud drive for quick reference each pay period.

---

## 5️⃣ Fixed Assets & Depreciation  
- [ ] Record any new asset purchases (equipment, furniture, software).  
- [ ] Assign each asset to the correct asset account and add a description.  
- [ ] Update depreciation schedules (straight‑line, MACRS, etc.) for the month.  
- [ ] Review the asset register for disposals or retirements; record gains/losses.  
- [ ] Verify that asset insurance coverage is up‑to‑date.  
> 💡 **Tip:** Use a spreadsheet or asset‑management module that automatically calculates monthly depreciation.

---

## 6️⃣ Financial Reporting & Review  
- [ ] Generate a month‑end Balance Sheet and compare to the prior month.  
- [ ] Prepare a cash‑flow statement (operating, investing, financing).  
- [ ] Review key financial ratios (gross margin, net profit, current ratio).  
- [ ] Share the financial package with stakeholders (owner, investors, lender).  
- [ ] Archive all supporting documents (receipts, statements) in the appropriate folder.  
- [ ] Back up the accounting database and store a copy off‑site.  
> 💡 **Tip:** Schedule a 30‑minute “financial health call” with your accountant to discuss the reports.

---

## 7️⃣ Compliance & Year‑End Prep (Quarterly/Monthly Overlap)  
- [ ] Verify sales tax collection and file monthly/quarterly returns as required.  
- [ ] Review any industry‑specific licensing fees or regulatory filings.  
- [ ] Update the chart of accounts for any new revenue streams or expense categories.  
- [ ] Ensure all electronic signatures and digital receipts meet audit standards.  
- [ ] Conduct a quick internal audit: spot‑check 5 random entries for accuracy.  
> 💡 **Tip:** Keep a checklist of filing deadlines (sales tax, payroll tax, etc.) pinned to your calendar.

---

## How to use this checklist  
1. **Print or duplicate** the list for each month.  
2. **Assign owners** to each section (e.g., “Bookkeeper,” “Office Manager”).  
3. **Mark items** as completed in real time; use a digital task manager if you prefer.  
4. **Review the completed checklist** with your accountant before filing tax returns.  
5. **Store the signed, completed checklist** in your monthly bookkeeping folder for audit trails.  

*Consistency is key—treat this checklist as a non‑negotiable part of your month‑end close routine.*