Accounting software can cater to your bookkeeping needs and offers the most robust features and automation available. This is a great option for busy business owners who want to streamline their bookkeeping. Unassigned transactions can create a murky financial picture and hinder tax preparation.
Reconcile bank statements
Your vendors only trust you as much as you are forthcoming with your payments. Hence, check all your vendor invoices and check if you’ve missed any payments. If you’re past the deadline on any invoices, make it a priority to settle it before the new month kicks off. A big part of not letting anything slip through the cracks is updating your bookkeeping software. It can only help you as much as you keep it updated with all possible aspects of your monthly finances.
Categorize transactions accurately
Reach out to experts, including tax accountants and tax attorneys, if you need help. A tax accountant understands what you need to accomplish when handling your year-end accounting and can make sure you’re following your checklist properly without missing any steps. An accountant can also give you advice on streamlining and improving your processes for next year. Reconciling your accounts is the process of comparing what you record in your accounting books with the transaction on your bank or credit card statement. Check for data entry errors to clean up and sort out your books. You can find these types of errors by double-checking your work and preparing trial balances at the end of each reporting period.
Comparing your bank statements to your the audit committee requirements accounting software to ensure all transactions are appropriately recorded is reconciling your bank accounts. Sort through invoices, credit card statements, receipts, bank statements, and other necessary financial data. At this point, you should identify any missing information and reach out to your clients for clarification or additional documentation. Just like with bank reconciliation, ensure your credit card statements align with your small business bookkeeping records.
- Resist the urge because this practice can create a quagmire that blurs the line between your finances and the finances of your business.
- You will have all the resources necessary by the end of this manual to approach your bookkeeping clean-up with assurance and comfort.
- This report includes information, such as sales, operating costs, operating profit and overall profits.
- To fix bad books due to errors of omission, comb through your records (e.g., receipts).
- Accurate and timely accounting processes help support your business success financially and legally.
File your taxes
If you’re using an automated workflow system, this step may happen automatically. If you’re using a paper-based system or spreadsheet, you will need to manually create the following month’s checklist. By following the same process each month, you can ensure your clients’ books are in order and that you have not missed any steps. Double-check your chart of accounts to ensure items like credit card payments are classified correctly.
Step 3: Prioritize tasks
Please note that if you don’t collect sales tax or fail to pay it, you may be penalized with interests, or your property may be seized, both of which will affect your credit score. Adding tax filings to your monthly activities removes all that risk. Depending on when a check is deposited, it may not reflect in your account till the following day. If you have deposits in transit or outstanding checks, let your account reflect it so it all balances. Ensure that everything that needs to be recorded, uploaded, and categorized is properly squared away, and you haven’t missed anything over the past month.
General checks in the bookkeeping cleanup checklist refer to the tasks needed to ensure that the financial records are accurate and up-to-date. The following are some general checks that should be performed during bookkeeping cleanup. You are looking to gather all of your bank statements, receipts, invoice, and other related financial information. By dedicating designated time slots for bookkeeping tasks, you can consistently categorize transactions, reconcile accounts, and monitor your financial health. This regular upkeep prevents small issues from snowballing into a future clean-up project.