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10 Essential Monthly Bookkeeping Tasks to Keep Your Accounting Firm on Track

Is your accounting firm struggling to keep up with the constant demands of bookkeeping? Managing your business finances can be overwhelming, but the key to staying on top of it is consistency. By breaking down bookkeeping into smaller, manageable tasks that you tackle each month, you can keep your records clean, accurate, and stress-free.

In this blog, we’ll guide you through 10 simple monthly tasks that can help you stay organised, avoid last-minute scrambles, and make bookkeeping and accounting a breeze. Let’s dive in!

10 Monthly Tasks to Simplify Your Bookkeeping

1. Reconcile Your Bank Accounts

Reconciling your bank accounts involves comparing your accounting records with your bank statements to ensure every transaction aligns. By identifying discrepancies, you can address issues before they escalate into larger problems.

Regardless of whether you handle bookkeeping manually or through bookkeeping software, it’s essential to verify that the total at the end of each month on your bank statement matches the figures in your bookkeeping records.

2. Review and Categorise Expenses

According to HMRC, keeping well-organised expense records can significantly reduce your tax burden, as you’ll be better prepared to claim all possible deductions. A monthly review also gives you valuable insights into your spending habits.

Businesses that regularly review expenses are more likely to find opportunities for cost reduction and improve their bottom line, with studies showing savings of up to 10% annually.

3. Send Invoices and Follow Up on Payments

Cash flow is vital for your firm’s stability, and sending invoices promptly helps ensure it stays healthy. According to BACS, an astonishing 76% of businesses are being affected by late payments of up to 6 months beyond agreed contract terms. To avoid this, make invoicing and payment follow-ups a monthly habit. Automated tools can help send timely reminders and prevent delays.

4. Track Accounts Payable

Just as it’s important to manage your accounts receivable, tracking your accounts payable is equally crucial. Each month, review your bills and ensure you’re paying vendors, suppliers, and contractors on time. Late payments can damage relationships and lead to costly penalties.

Setting reminders for due dates and keeping a running log of your bills will ensure you stay in good standing with everyone you owe.

Also Read: How Outsourcing Bookkeeping Simplifies Month-End Close for Accounting Firms

5. Record and Organise Receipts

Receipts might seem like small details, but they’re essential for telling your financial story. Instead of letting them pile up, take a few minutes each month to organise and match them with your expenses.

It’s a small task that can save you major stress when tax season or audits roll around.

6. Review Payroll

If you have employees, payroll is a critical monthly task. Ensure that all payroll entries are accurate and that all deductions, taxes, and benefits are properly accounted for. Payroll mistakes can lead to unhappy employees and potential compliance issues with tax authorities.

7. Review Financial Statements

Your financial statements such as your balance sheet, income statement, and cash flow statement are key indicators of your business’s health. By reviewing them monthly, you can spot trends, identify issues, and make adjustments before problems arise.

This regular financial checkup also helps you monitor performance against your goals and provides the data needed to make informed business decisions.

8. Back Up Your Financial Data

Backing up your financial data might be a task you overlook until it’s too late. Regularly backing up your bookkeeping records ensures that all your important financial information is safe.

Whether you’re using cloud storage or external drives, ensuring that your data is safe and secure will protect you from loss due to technical failures, cyber-attacks, or accidental deletions.

9. Monitor Cash Flow

By monitoring your cash flow closely, you can forecast shortages or surpluses, adjust spending, and make better decisions around investments, purchases, or hiring. Monthly cash flow tracking keeps you proactive and prepared for any financial curveballs.

10. Review Your Budget

Your budget is like a financial compass, guiding your decisions and keeping your business on course. By reviewing it each month, you can spot any discrepancies between projected and actual spending. This not only helps you identify areas for improvement but also reveals investment opportunities.

Conclusion

The above-discussed monthly bookkeeping tasks and responsibilities are crucial for ensuring your accounting firm runs smoothly and efficiently. Commit to these practices and you can keep your financial records accurate, reduce stress during busy periods, and enhance overall business performance.