How to Transform Your Business Finances With My Monthly Bookkeeping Checklist
When was the last time you did an in-depth review of your business’s financial situation? Last week? Last quarter? ...or last year, when you filed your taxes?
No judgment here—we’ve all been there. But here’s the truth: spending time each month with your numbers reveals the deeper story of your business’s journey. Regular bookkeeping lets you discover patterns, opportunities, and potential you might never have noticed before.
Plus, you’ll avoid the stressful last-minute tax season rush.
Why You Should Review Your Finances Monthly
Does this sound familiar? Rushing to catch up on bookkeeping, spending hours piecing together financial history, and potentially missing important details that could help drive better business decisions. When you understand your numbers as they happen, you gain the power to make smarter choices for your business's future.
Ready to make monthly bookkeeping work for you instead of the other way around? This checklist breaks down exactly what you need to review each month to stay on top of your finances and make more confident business decisions.
✔️ Check Your Bank Reconciliations
Bank reconciliation isn't just about matching the numbers—it's your monthly reality check. By looking through your transactions each month, you’ll be able to stay ahead of problems and understand your business better. And you'll feel more confident about your spending decisions when you know exactly where your money's going.
What to look for during reconciliation:
Unrecognized transactions - flag anything unfamiliar to catch potential errors or fraud
Recurring payments - check if any subscriptions need to be adjusted or canceled
Payment patterns - spot trends in your cash flow
Outstanding items - track any checks or deposits that haven't cleared yet
✔️ Sort Your Revenue Documentation
Each invoice and payment needs a clear paper trail. Good documentation helps you track who's paid, who hasn't, and where your revenue is coming from. Plus, you'll have reliable numbers to guide you when you need to make important business decisions.
Key revenue organization tasks:
Track overdue payments - follow up professionally with late-paying clients
Update revenue forecasts - use current patterns to predict future income
Review pricing - check if your rates still make sense for your market
Document changes - note any shifts in revenue streams or client patterns
Categorize revenue sources - separate income by product, service, or client type
Review refunds/credits - track and document any adjustments to customer bills
✔️ Track and Categorize Expenses
Expense tracking is your window into what's really working in your business. Beyond just watching costs, it reveals which investments are paying off and where you might need to adjust course. This clarity helps you confidently decide where to focus your resources.
Monthly expense management includes:
Categorize expenses - sort each transaction into the right business category
Digitize receipts - scan and store paper receipts somewhere you can easily access and find them later
Review spending patterns - spot trends and opportunities to save
Flag unusual expenses - investigate any unexpected charges or increases
Check vendor bills - verify all charges match agreed-upon terms
Document travel expenses - keep clear records of business-related travel
Review employee expenses - validate and track team member reimbursements
✔️ Review Your Cash Flow
A regular cash flow review is your early warning system. It alerts you to potential cash crunches before they happen and highlights opportunities while you can still act on them.
Monthly cash flow review tasks:
Plan for expenses - anticipate upcoming costs and prepare accordingly
Track seasonal patterns - prepare for predictable business cycles
Identify growth opportunities - assess which opportunities your cash flow can support
Review investment timing - understand when you can safely reinvest in your business
Monitor working capital - maintain healthy cash reserves for operations
Project future needs - estimate upcoming cash requirements
Review credit needs - plan ahead for potential financing
Assess emergency funds - maintain adequate cash reserves for unexpected costs
✔️ Update Your Accounts Payable
Staying on top of your bills gives you options in your business. You can grab discounts when they make sense, keep your vendors happy to work with you, and build the kind of credit rating that opens doors.
Essential monthly payables tasks include:
Review outstanding bills - create a plan and budget for the month ahead
Evaluate vendor terms - ensure payment arrangements still work for your business
Schedule payments - plan around your cash flow peaks and valleys
Verify due dates - prevent late fees and maintain good standing
Review automatic payments - confirm recurring bills are correct
Track purchase orders - match them to incoming invoices
Review payment methods - choose the most cost-effective options
✔️ Check Your Accounts Receivable
Money owed to your business represents future opportunities or challenges if not managed properly.
Monthly receivables tasks:
Monitor payment trends - identify which clients consistently pay on time
Update the collection process - keep your follow-up communications professional, create templates for follow-up
Document payment plans - record any special arrangements with clients
Check invoice accuracy - ensure all bills went out correctly
Set up payment reminders - create a system for consistent follow-up
Track partial payments - maintain clear records of remaining balances
Review payment methods - ensure your options work for clients, and add new options if needed
Flag at-risk accounts - identify potential collection issues early
✔️ Review and Record Your Payroll
If you have employees, accurate payroll management ensures your team gets paid correctly and your business stays compliant. A monthly review helps you catch issues early and prepare for upcoming changes.
Your monthly payroll review tasks should include:
Verify payments - check all wages and withholdings for accuracy
Update employee records - maintain current information for all team members
Plan for changes - prepare for upcoming compensation adjustments
Track PTO balances - maintain accurate time-off records
Monitor overtime - verify all extra hours are properly calculated and justified
Review benefits - ensure proper deductions and employer contributions
Document bonuses - record any special or performance-based payments
Audit timesheets - verify hours worked match payments made
✔️ Review Your Business Metrics
Monthly metric reviews turn your financial data into clear action steps. You can spot opportunities and address challenges early when you understand your key numbers.
Important monthly metric review tasks:
Track key indicators - monitor the numbers that drive your business
Compare benchmarks - measure performance against your goals
Review profit margins - analyze earnings by product or service
Check growth rates - compare current and previous period numbers
Analyze client data - track acquisition and retention rates
Track conversion rates - measure marketing effectiveness
Review productivity - measure output and efficiency metrics
✔️ Plan for Tax Obligations
Monthly tax planning helps you avoid year-end surprises and also enables you to maximize your deductions. Regular reviews ensure you're prepared for your tax obligations.
Monthly tax planning tasks:
Calculate estimated taxes - calculate and submit your quarterly payments to stay on track
Organize receipts - document deductible expenses as they happen
Review tax categories - ensure expenses are classified correctly
Track vehicle expenses - log business mileage and related costs
Document donations - record charitable contributions
Monitor asset purchases - track new equipment and depreciation
Review retirement contributions - maximize tax-advantaged savings
Verify contractor payments - prepare for 1099 reporting
✔️ Document Business Changes
Your business evolves every month, and documenting these changes is essential for both legal compliance and business growth.
Be sure to do the following:
Update contracts - create new agreements when necessary
Record policy changes - document updates to business procedures
Review insurance - note any changes to coverage
Document meetings - keep minutes of any important decisions, especially where finances are concerned
Update employee records - maintain current staff information
File correspondence - save important business communications, especially with clients
Monitor compliance - maintain required legal documentation
✔️ Back Up Your Financial Data
Don't let a crashed computer or lost file derail your business. Monthly backup checks mean your financial records are always safe and ready when you need them.
Monthly backup and security tasks:
Test backup systems - verify all data is saving correctly
Update passwords - maintain strong security protocols
Check file storage - ensure documents are properly saved
Scan for threats - run security checks on financial systems
Update emergency recovery plans - maintain current recovery procedures
Check cloud storage - verify that syncing is working properly
Secure paper records - maintain organized physical storage
Move Forward with Confidence
Here's the thing about monthly bookkeeping: when you break things down into simple steps, it becomes your business's early warning system. You'll catch problems while they're still small and spot potential opportunities while they're still fresh.
Ready for more? Download our free "Basics of Self-Employment: Tax Survival Kit" to start your journey toward financial confidence, or contact us today to discover how we can help you create a customized bookkeeping system that works for your unique business needs.
*This guide is part of our comprehensive series on financial management for business owners. For more insights on building a strong financial foundation, check out our recent post on common bookkeeping mistakes that cost self-employed people money.*
