Keeping your books up to date is an essential first step in being able to monitor the business’ performance. Maintaining up-to-date and accurate financial records is vital to be able to make rational and objective business decisions. As many different tasks need to be completed as part of the bookkeeping process, it can be easy to overlook something which may not need to be completed daily.
A monthly bookkeeping checklist is therefore an invaluable tool, ensuring that all the bookkeeping tasks are completed each month, and therefore that the financial data can be relied upon for decision making.
What should be included in a bookkeeping checklist?
The checklist should include all the tasks that need to be completed to ensure the financial information is up-to-date and that key balance sheet accounts are reconciled. It is important that these reconciliations take place, in order to identify and resolve any mispostings arising during the transaction processing in the month, and to ensure the accuracy and completeness of the financial records.
The checklist should be tailored to your business, and may include ensuring that supporting systems are up to date at the month end, and that all relevant information from supporting systems have been imported into Xero.
The checklist should assign each task to a relevant member of staff, and have a tickbox to show the task has been completed. Adding a column for notes is also a good idea, to keep a record of any anomalies in the month for future reference.
Key tasks to include to ensure transactions are up to date include:
- All sales invoices have been posted
- All purchase invoices received have been processed
- All expense claims have been posted
- All credit card expenses and petty cash receipts have been processed
- Fixed asset additions have been registered and depreciation has been posted
- The bank reconciliation is up to date and agrees to the bank statement
- Payroll has been run and the payroll journal posted
Further tasks are then required to ensure the accuracy of the financial records. This involves reconciling all the balance sheet control accounts. Depending on the business, examples of tasks include:
- Reconciling supplier statements to the balances in aged payables. This can identify missing invoices which need to be requested and posted to reflect the business’ true liabilities.
- Reviewing aged receivables for old items and chasing payment. This can identify debts which are unlikely to be recovered, and need a doubtful debt provision to more accurately reflect the amount due from customers.
- Completing a stock count and adjusting the stock value accordingly.
- Posting prepayments and accruals, and considering whether any income adjustments are necessary to ensure that the income recognised correctly reflects the work completed in the month.
- Completing the VAT return checks and submitting the return
- Reconciling all other balance sheet control accounts.
- Reviewing the monthly Profit and Loss Account for inconsistencies and investigating.