Maintaining accurate and updating financial records monthly is crucial for any business. Monthly bookkeeping not only simplifies VAT preparation but also helps make sure you keep track of your cash flow.
To make bookkeeping easier, we’ve put together a practical monthly checklist. These simple steps will guide you through reviewing transactions, reconciling accounts, and staying organized, so you can focus on running your business with confidence.
1. Reviewing Income and Expenses
Review all income and expense transactions to ensure everything is recorded and correctly categorised in its respective account code. This helps keep your Profit and Loss statement accurate and reliable month after month including a correct classification of all the expenses.
2. Reconcile Bank Statements
Match your recorded transactions against your bank statements. Make sure the month end balances on the statements agree with the balances on the accounting software and that nothing is missing or duplicated. This ensures your accounts reflect your actual financial position.
3. Check Overdue Receivables & Payables
Follow up on any unpaid sales invoices and remind clients when necessary. Staying on top of your receivables helps generate cash flow, which in return supports timely payment of all expenses. Monitoring these areas regularly also reduces the risk of bad debts and keeps a healthy working capital.
4. Post Payroll Accurately
Record payroll expenses monthly to ensure all salary and liabilities are correctly accounted for. This includes not just payments to employees but also contributions due to the Commissioner for Revenue. Late postings can lead to missed deadlines and unnecessary interest and penalties.
5. Prepare and Reconcile Cash Flow
Even with the growing use of electronic payments, cash transactions remain a part of daily operations for many businesses. Keeping proper records and regularly reconciling the cash ensures that your financial reports are showing an accurate picture of your business’s financial position.
By following the above check list, you would be regularly reviewing and updating the company’s financial reports. These reports are essential tools for understanding your business’s current position and budgeting for future years.
