10 Essential Monthly Bookkeeping Tasks for Small Business Owners

Managing your business finances doesn’t have to be a time-consuming chore. With a well-structured monthly bookkeeping workflow, you can stay on top of your financial tasks, avoid costly mistakes, and free up more time to focus on growing your business.

Here are 10 Essential Monthly Bookkeeping Tasks for Small Business Owners:

Step 1: Organize and Gather All Financial Documents

Start each month by collecting all the necessary financial documents for the previous month.

This includes:

• Bank and credit card statements

• Receipts (digital and paper)

• Invoices (both sent and received)

• Payroll records (if applicable)

• Any other relevant financial documents

Step 2: Reconcile Your Bank and Credit Card Accounts

Reconciling your accounts ensures that your bookkeeping records match your bank and credit card statements. This is a crucial step to catch any errors, missed transactions, or fraudulent activity.

Follow these steps:

1. Compare transactions in your bookkeeping software with your statements.

2. Mark transactions as cleared or matched.

3. Investigate and resolve any discrepancies immediately.

 Step 3: Record and Categorize Income

Ensure all income from the previous month has been recorded in your bookkeeping system. Assign the correct income categories to each transaction to maintain accurate financial reports.

Step 4: Record and Categorize Expenses

Review all business expenses and categorize them appropriately.

Be sure to:

• Separate personal expenses from business expenses (if they’re accidentally mixed).

• Double-check recurring expenses like subscriptions or software fees.

Step 5: Review and Send Invoices

Stay on top of your accounts receivable by:

1. Reviewing all outstanding invoices.

2. Sending reminders for overdue payments.

3. Issuing new invoices for completed work or sales.

Step 6: Track and Pay Bills

Check your accounts payable to ensure all bills are accounted for and paid on time. Late payments can lead to penalties and damage vendor relationships.

Set up:

• Automatic payments for recurring bills.

• Alerts for upcoming due dates.

Step 7: Review Cash Flow

Understanding your cash flow is key to running a healthy business. Take time each month to:

• Analyze your cash inflows and outflows.

• Identify trends, such as seasonal slowdowns or unexpected expenses.

• Adjust spending or saving plans accordingly.

Step 8: Prepare Financial Statements

Generate and review the following reports:

• Profit and Loss Statement (P&L): Shows your revenue, expenses, and net profit.

• Balance Sheet: Summarizes your assets, liabilities, and equity.

• Cash Flow Statement: Tracks how cash moves in and out of your business.

These reports give you a clear picture of your business’s financial health and help with decision-making.

Step 9: Set Aside Money for Taxes

Avoid tax season stress by setting aside funds for your tax obligations. Calculate and transfer a percentage of your income into a separate tax savings account. If you’re required to make quarterly estimated tax payments, mark the due dates on your calendar.

Step 10: Perform a Monthly Review

End the month with a thorough financial review.

Ask yourself:

• Are all transactions recorded and categorized correctly?

• Are there any unexpected expenses or income sources?

• Did I meet my budget goals for the month?

Use this review to identify areas for improvement and plan for the upcoming month.

Tips for Saving Time on Monthly Bookkeeping

• Automate Repetitive Tasks: Use software to automate invoicing, payment reminders, and bank feeds.

• Schedule Dedicated Time: Block out a specific day each month for bookkeeping tasks to stay consistent.

• Outsource When Necessary: If bookkeeping feels overwhelming or time-consuming, consider hiring a professional to handle it for you.

Final Thoughts

Managing your monthly bookkeeping tasks doesn’t have to be overwhelming. With the right processes and consistency, you can keep your finances in order and make smarter business decisions. However, if you’d rather focus on growing your business while leaving the financial details to a professional, MMF Business Solutions, LLC is here to help. We specialize in streamlining bookkeeping workflows, ensuring your records are accurate, and freeing up your time for what matters most—your business. Contact us today to see how we can support your financial success!