What Does Monthly Bookkeeping Actually Include?
“Monthly bookkeeping” sounds straightforward, but it can mean very different things depending on who provides the service.
Some services simply categorize transactions from the bank feed. A complete monthly bookkeeping process goes much further.
Tired of spending your evenings trying to keep QuickBooks organized? Dunham Bookkeeping Services provides monthly bookkeeping support that keeps your accounts current and gives you financial reports you can actually use.
Recording and categorizing transactions
Every month, money moves in and out of your business through bank accounts, credit cards, payment processors, loans, and other accounts.
Your bookkeeper reviews those transactions and records them in the correct categories. That includes more than deciding whether something was office supplies or advertising.
The bookkeeper may also need to determine whether a transaction represents:
• Business income
• A transfer between accounts
• A loan payment
• An owner contribution or withdrawal
• A fixed asset purchase
• A customer refund
• A personal expense that entered the business account
Correct categorization matters because those decisions affect your financial reports and tax return.
Reconciling bank and credit card accounts
Reconciliation compares the transactions recorded in your accounting system to the activity shown on each bank or credit card statement.
This process helps identify:
• Missing transactions
• Duplicate entries
• Incorrect amounts
• Transactions recorded in the wrong account
• Changes made to previously reconciled activity
A connected bank feed does not replace reconciliation. The bank feed imports information, but it does not confirm that everything was recorded correctly.
Reviewing income
Your bookkeeper reviews how income entered the business and whether it was recorded properly.
For businesses that send invoices, this may include checking customer payments and reviewing unpaid balances.
For businesses using Stripe, Square, PayPal, or another payment processor, the review may include separating gross sales from processing fees, refunds, tips, and sales tax.
Depositing money into the bank is only one part of the transaction. The accounting records need to show what the deposit represents.
Reviewing expenses
Monthly bookkeeping also includes reviewing business expenses for accuracy and consistency.
A bookkeeper may notice that a recurring software charge suddenly appears in a different category, a vendor payment was entered twice, or a personal purchase was made from the business account.
Catching these issues monthly is much easier than trying to reconstruct an entire year during tax season.
Monitoring balance sheet accounts
The Profit and Loss gets most of the attention, but the Balance Sheet is just as important.
A monthly bookkeeper may review:
• Bank and credit card balances
• Customer invoices
• Unpaid vendor bills
• Business loans
• Payroll liabilities
• Sales tax payable
• Owner contributions and withdrawals
• Fixed assets
• Other business liabilities
These accounts often reveal bookkeeping problems that never appear on the Profit and Loss.
For example, recording an entire loan payment as an expense may make the Profit and Loss look reasonable while leaving the loan balance completely wrong.
Preparing financial reports
Once the month’s activity has been reviewed and reconciled, the bookkeeper prepares financial reports.
Most small businesses should receive at least:
• A Profit and Loss
• A Balance Sheet
• Additional reports relevant to the business
Those additional reports might include a Profit and Loss by Month, Accounts Receivable Aging, Accounts Payable Aging, or another report based on the company’s needs.
Reports should do more than exist inside QuickBooks. They should help the owner understand what happened during the month.
Flagging questions and unusual activity
A bookkeeper cannot determine the purpose of every transaction without input from the business owner.
Monthly bookkeeping often includes a list of questions about unfamiliar vendors, unclear deposits, personal purchases, missing documents, or unusual account activity.
This is not a sign that the bookkeeping process failed. It is part of keeping the records accurate.
A good bookkeeper also points out items that deserve attention, such as growing expenses, overdue customer balances, unexpected negative accounts, or missing loan information.
What may not be included?
Not every monthly bookkeeping package includes invoicing, bill payment, payroll, sales tax filings, inventory management, budgeting, or tax preparation.
Those services may be included in a larger package or offered separately.
This is why the scope of service matters. Before hiring a bookkeeper, ask what work will be completed each month, which reports you will receive, and what responsibilities will remain with you.
The real value is consistency
Monthly bookkeeping is not simply about keeping QuickBooks tidy.
It gives you current records throughout the year. Tax preparation becomes easier. Problems are caught sooner. You can review your financial position without wondering whether the numbers are accurate.
It also gives you back the time you would have spent sorting transactions, troubleshooting reconciliations, and searching online for answers to increasingly specific QuickBooks questions.
Ready to take bookkeeping off your monthly task list? Visit Dunham Bookkeeping Services to learn more about monthly bookkeeping support for service-based small businesses.
