A Proper Bookkeeping Checklist

Hey all!

Happy Friday.

We are already a month into the new year, and many entrepreneurs are closing out the books and records for 2021 and trying to make the ones for 2022 clean and efficient.

The beginning of the year is a great time to assess what works well with your bookkeeping and what you need to improve. Good, clean books are critical to your business, especially if you get audited.

In that vein, I’ve outlined some tasks below that you should do daily, weekly, monthly, quarterly, and yearly to help keep you on track.


Daily Tasks

  • Start every day knowing the amount of cash in the business:  This task ensures enough liquidity for the day’s expenditures. The profit-first method helps a ton here because you can see how much you have for each purpose: profit, owner’s comp, tax, OPEX, and any additional buckets you’ve created (e.g., payroll, COGS, etc.).


Weekly Tasks

  • Record Transactions: Record every transaction (customer billings and payments, vendor payments, etc.) in the proper account every week.
  • Document and file receipts: keep copies of all invoices, cash receipts, and cash payments and add them to organized files for easy reference. If you use software like QuickBooks Online, you can attach the verification directly to the transaction.
  • Review unpaid bills: Create records for each vendor, and keep track of the billing dates, amounts due, and payment due dates.
  • Prepare and send invoices: Be sure to include payment terms in invoices, and consider offering early payment incentives to get paid on time.
  • Pay vendors: track accounts payable and earmark funds to pay suppliers on time.
  • Review projected cash flow: create a statement showing the current cash position, expected cash receipts, and expected cash payments for the upcoming week.

Monthly Tasks

  • Reconcile your statements and accounting software: make sure all transactions, including cash ones, are accurate and that the business is working from the correct cash position.
  • Review past-due receivables: At the beginning of the month, send out friendly reminders to customers, clients, and anyone who owes the business money.
  • Analyze inventory status: reorder products that sell quickly and identify others that are moving slowly and may need to be marked down or discounted.
  • Process payroll: withhold, report, and deposit all applicable income, social security, Medicare, and disability taxes to the appropriate agencies by their due dates.
  • Review actual profit and loss vs. budget: If the business doesn’t have a budget prepared, compare the current profit and loss with the same prior-period year-to-date statements.
  • Review month-end balance sheet vs. prior period: Compare the current balance sheet with one from the same period in the previous year to see how the company manages its assets and liabilities.

Quarterly tasks

  • File estimated quarterly taxes
  • Review quarterly payroll reports: The IRS and most states require quarterly payroll reports and payments.
  • Review sales tax and make payments: if you don’t already, I highly recommend having a separate sales tax bucket.
  • Prepare a year-to-date P&L estimate: Evaluate how much money the business makes, the difference between revenue and expenses, and what has caused the discrepancy.
  • Review your cash flow and see how it matches your statements: We review and adjust allocation percentages every quarter using the Profit First method. We change based on the current financial information and listen to the buckets.

Annual tasks

  • Review past-due receivables: check past-due receivables and decide whether to send past-due bills to a collection agency or write them off for a tax deduction.
  • Review your inventory: Calculate the value of items not sold. Then use the unsellable inventory as a deduction for year-end taxes.
  • Fill out IRS forms W-2, 1099-Misc, and 1099-NEC: These forms are usually due at the end of January, so you have to make sure to stay on top of your contractors.
  • Review and approve ear-end financial reports and tax returns: don’t forget to close your books every year and ensure that you have the proper backup documentation. It should be pretty straightforward if you’ve been following the proceeding tasks all year.


Quote of the Week

“Out of clutter, find simplicity.

From discord, find harmony.

In the middle of difficulty lies opportunity.”

–       Albert Einstein


Task of the Week

If you don’t have proper and outlined bookkeeping procedures in place, now is the time to get started. Print out this list or use it as a template to create your own daily, weekly, monthly, quarterly, and yearly tasks. Having the proper procedures in place can help make bookkeeping a breeze.