What are the essential monthly bookkeeping tasks you need to perform in order to take care of your business? In this article, I’ll walk you through the important tasks I do for each client at the end of each month.

The Quick and Dirty

Here’s a quick overview of month end tasks:

1. Gather your bank statements

2. Reconcile your accounts

3. Create and (actually) look at your reports

Gather Your Bank Statements

First step for essential monthly bookkeeping tasks is to gather your statements. This can be physically or electronically, but make sure you have copies. And not just copies in your online banking; downloaded copies. I’ve had so many instances where a client needed statements from a year ago and couldn’t get copies from the bank anymore. It would’ve saved a ton of time, energy, and money if they’d had saved copies.

The necessary statements aren’t just your main bank, either. I’m talking bank statements, credit card statements, PayPal statements, loan statements, etc. You’ll need these in step two when you reconcile.

Reconcile your Accounts

Once you have your statements, it’s time to reconcile. What you’re doing in this step is ensuring that the information in your software matches what actually happened in the bank. This is a crucial monthly bookkeeping task.

Using Xero

In Xero this is the bank reconciliation report. Set the date to match the closing date on the statement. Then check that the ending balance in Xero matches the ending balance of the bank statement. If it does, go into the bank account and cross-check between the transactions in Xero and those in the bank.

Using Quickbooks

In QuickBooks Online (not Self-Employed) go to the reconcile tab and enter the closing date and balance. Then select the corresponding transactions to match the moth end amounts in your bank.

A very common reason that the ending balance doesn’t match is because a transaction has been recorded twice in the software. Likewise, sometimes the bank feeds don’t pull in all the transactions and you have to find which one is missing.

Don’t skip reconciliation! While categorization ensures all the transactions show up in the right place in reports, reconciling ensures you can trust the amounts in your reports because you know with 100% certainty the numbers reflect what actually happened in the world.

Create and (actually) Look at Reports

After you’ve gathered your statements and reconciled your accounts, the next monthly bookkeeping task is to look at your reports. Looking at your reports monthly is a reality check against how you thought you did during the month.

There are three reports I look at each month:

Balance Sheet
Income Statement (P&L)
Statement of Cash Flows

Each report is an important and informative piece of understanding your finances and looking at the past month. The balance sheet gives you the big picture view of your business finances, while the profit and loss tells you about the expenses and income in your business. The statement of cash flows is my favorite, because it tells you how much cold hard cash passed through your business and where it went.

It’s okay if you don’t understand all the numbers at first. Do your best, take a look each month, and start getting curious. The more time you spend in your numbers, the more you’ll become familiar with them and be able to see changes as the months progress.

Conclusion

Now you know all that’s involved with month end bookkeeping tasks, make sure to set up systems and recurring tasks so you can give your finances the love it deserves. Having this monthly check saves you down the road when it’s tax time and your balance is missing a thousand dollars. Save yourself a lot of time, stress, and money by doing these essential monthly bookkeeping tasks.

I’m Morgaine Trine - the Financial Strategist and Bookkeeper at Honestly Bookkeeping, a firm dedicated to helping creative entrepreneurs create long-term wealth and build sustainable businesses.

The goal of any business isn’t to make money. It’s to support the life, dreams, and goals we each have as an individual. That just happens to take money. And since it does, I’m here to help you bring in the cash, manage it well, and make informed decisions with your finances.

When not behind the computer screen, I'm reading a book or traveling somewhere new. Probably both.
If you want to get bi-weekly bookkeeping reminders, as well as helpful financial resources and exclusive content, subscribe here.

Essential Monthly Bookkeeping Tasks that You Need to Do