Bookkeeping is often seen as a routine chore, but in reality, it’s a critical function that keeps your business running smoothly. By consistently maintaining your financial records, you gain clarity, stay compliant, and make informed decisions. The good news? You don’t need to spend hours each day to stay on top of your books.
Here are 10 essential bookkeeping tasks you should tackle every month to stay in control of your finances and reduce stress during year-end reporting.
Keep Your Business Finances in Shape: Monthly Bookkeeping Essentials
1. Reconcile Your Bank Accounts
Start each month by reconciling your bank accounts. This means comparing your internal records with your bank statements to ensure every transaction is accounted for. Discrepancies can signal duplicate entries, missed transactions, or even fraud.
Whether you use spreadsheets or accounting software, always verify that your month-end bank balance matches your ledger. It’s a simple step that builds financial accuracy.
2. Review and Categorise Business Expenses
Organising your expenses by category each month has multiple benefits. It ensures you’re ready to claim eligible deductions at tax time and gives you insights into spending trends.
According to HMRC, businesses with well-maintained expense records are better positioned to reduce their tax burden. Regular expense reviews can also highlight areas where you can cut costs—often resulting in annual savings of up to 10%.
3. Send Invoices and Follow Up on Outstanding Payments
Timely invoicing ensures consistent cash flow. Don’t wait until the end of the quarter—send invoices as soon as work is completed and set reminders to follow up on late payments.
A BACS report revealed that 76% of UK businesses face delayed payments, sometimes up to six months. Consider using automated tools to send recurring invoices and follow-ups, reducing delays and administrative burdens.
4. Track Accounts Payable
Just as you track incoming payments, you should also stay on top of what you owe. Review your outstanding bills each month and pay suppliers, vendors, and contractors on time.
Late payments can strain relationships and result in penalties. Keep a log of upcoming due dates or automate alerts so you never miss a payment.
5. Organise and Match Receipts
Receipts may seem insignificant at the moment, but they’re vital during tax season or audits. Rather than letting them accumulate, spend a few minutes each month matching receipts to your recorded expenses.
Using digital tools to scan and file receipts can simplify this process and keep your documentation tidy and audit-ready.
6. Review Payroll for Accuracy
If you have employees, monthly payroll checks are a must. Ensure all payments are accurate, deductions are correct, and taxes and contributions are properly recorded.
Payroll errors can lead to employee dissatisfaction and compliance issues with tax authorities. Monthly reviews help prevent costly mistakes.
7. Analyse Financial Statements
Your financial statements—especially your balance sheet, income statement, and cash flow report—offer a snapshot of your business health. Reviewing them monthly can help identify trends, spot issues early, and measure performance against your goals.
These reports guide smart decision-making and ensure your business stays financially agile.
8. Back Up Your Financial Data
Losing financial records to a system crash or cyber-attack can be devastating. Make it a habit to back up your financial data every month—whether to a secure cloud platform or external drive.
Regular backups provide peace of mind and protect your business from data loss due to unexpected events.
9. Monitor Your Cash Flow
Cash flow management is vital for business survival. Track how much money is coming in and going out each month to avoid unpleasant surprises.
Monthly monitoring helps you forecast shortages or surpluses, plan for large expenses, and make confident decisions about hiring, investment, or expansion.
10. Review and Adjust Your Budget
Think of your budget as your business’s financial roadmap. Compare actual performance against your projections to identify overspending or underperforming areas.
Monthly budget reviews help refine your financial strategy and uncover new opportunities to grow or reallocate resources more effectively.
Final Thoughts
Bookkeeping doesn’t need to be complicated or time-consuming. By committing to these ten monthly tasks, you’ll keep your finances in order, avoid costly mistakes, and stay prepared for tax season. More importantly, you’ll gain better control over your business’s financial direction and long-term sustainability.
Get in touch with AccelUS today!
