Bookkeeping, at it’s core, is keeping track of the money going in and out of your business. Bookkeepers record your income and expenses so you have the information you need to make informed decisions for your company. Clearly, bookkeeping is important.<\/p>\n
But bookkeeping is also tricky. Without a doubt, you need to be accurate and organized with your bookkeeping to comply with the law, analyze your business’ performance, and create insightful financial reports. Our bookkeeping checklist can help you establish a habit of staying organized and ensuring your numbers are accurate.<\/p>\n
Without further ado, here are the five things you need to check off monthly to stay on top of your bookkeeping.<\/p>\n
In order to track your numbers, you first have to record them. Record all expenses and income into your accounting system regularly throughout the month. This means every<\/em><\/strong> transaction- from your bank accounts to credit cards to PayPal and Shopify.<\/p>\n \ud83d\udd35 Helpful hint: If your accounting software has automatic bank syncing, use it! It makes this process much, much easier. Just be sure to proactively check for any errors.<\/strong><\/em><\/p>\n This step is all about organization. Your chart of accounts is a list of categories that describe your business’ transactions. The money going in and out of your business needs to be categorized accordingly so your business can remain organized. Give each income and expense a relevant category, like “overhead,” “SAAS,” or “marketing.”<\/p>\n Now it’s time to reconcile, which simply means that you’re comparing your records against a report or source outside of your accounting software. The most common form of reconciliation is bank reconciliation, or comparing the records from your accounting software with your bank statements.<\/p>\n Check for anything that doesn’t match so you can make sure you’re not missing records. Make sure you reconcile once a month minimum so you can ensure that the numbers in your accounting system are correct.<\/p>\n It’s time to look at your trends! Your Profit and Loss Statement, or P&L for short, shows how much money you’ve made and spent over a given period- such as each month or quarter. Your P&L is important in showing the profitability of your business. Here are a few numbers you’ll encounter in a P&L:<\/p>\n2. Categorize income and expenses<\/h3>\n
3. Reconcile your account<\/h3>\n
4. Review your P&L<\/h3>\n