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Nov
09

Month End Bookkeeping Tasks

Shoebox Accounting Month End BookkeepingClosing your books every month is an important bookkeeping task that should be part of your monthly bookkeeping routine. By closing your books on a monthly basis will help you have cleaner books, be more organized, and you will have an easier time preparing your books to give to your tax preparer at the end of the year. Here is a 12 Step process to follow when you close your monthly accounting records.

  1. Accounts Receivable
      Verify all clients have been invoiced for work completed during the month.
      Double check your deposits and monies received have been posted to QuickBooks.
      Reconcile your Aging Accounts Receivables report against your Balance Sheet and against your General Ledger. Make any changes or adjustments to ensure all records match.
  2. Accounts Payable
      Make sure all bills have been paid.
      Double check all automatic bill payments and any recurring payments have been posted to QuickBooks (example – loan payments, monthly car insurance payments, etc).
      Post any outstanding bills to Accounts Payable so you can track what needs to be paid next month.
      Reconcile your outstanding vendor bills and vendor statements against your Accounts Payable Reports and your Balance Sheet. Make sure your records match those of your vendors. Make any adjustments or changes.
  3. Monthly Reconciliations
      Reconcile Bank Accounts - Reconcile all bank accounts using your monthly bank statements and monthly credit card merchant statements. Print and file the reconciliation reports and bank statements when finished.
      Reconcile Loan Balances and Lines of Credit – Reconcile your loan balances and lines of credit against your monthly statements. Print and file the reconciliation reports.
  4. Track your Fixed Assets
      Record your monthly depreciation.
  5. Prepaid Income and Expenses Adjustments
      Record your monthly journal entries to allocate your prepaid income and expenses.
  6. Write Off Bad Debt
      Write off any uncollectable invoices to bad debt. In QuickBooks, this can be done using a Credit Memo.
  7. Verify all Checks and Invoice Numbers are Accounted For
    Checks and Invoices are generated in numerical order. If any check numbers or invoice numbers are missing, figure out why and record the missing transactions. If they were voided or deleted, make sure you keep a record as to why they were voided and/or deleted.
  8. Review Financial Statements
    Look for any unusual balances, missing items, or mistakes. If anything looks or feels “off” look into it and figure out why the balance seems odd to you. Make any corrections or necessary adjustments.
  9. Update Budget
    Update your budget and review your budget vs. actual numbers. Determine why some budget amounts are off for the month. Feel free to adjust your budget as needed.
  10. Print and File Financial Statements and Financial Reports
  11. Close Books
    If you’re using QuickBooks, use the “Closing Date” feature. This great feature allows you to lock previous months and protect with a password. This keeps yourself and your bookkeepers from accidentally changing previous months. The “Closing Date” feature can be found under the company drop down menu. If you find any errors later on, those errors need to be corrected in the current period.
  12. Back Up
    Back up your QuickBooks, Peachtree, or other accounting software.

There you have it – 12 steps to follow to close your books at the end of each month. Adding these tasks to your monthly bookkeeping routine will help you have cleaner books, be more organized, and you’ll have an easier time preparing your books to give to your tax preparer at the end of the year.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


16 comments

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  1. Keri Mandaloniz says:

    This was a really wonderful post. Thank you for your provided information.

    1. Michelle Edwards, CPA says:

      Thanks for reading! Let me know if there are any other topics you’d be interested in learning more about.

  2. ANNELIES says:

    i would like to know what reports to print at month end.

    kind regards

    1. Michelle Edwards, CPA says:

      Every business is different and has unique reporting needs. In general, you’ll want to make sure you save copies of your bank statements, merchant statements (credit card processing), credit card statements, and bank reconciliation reports. I also recommend printing a copy of your financial statements – Balance Sheet, Income Statement (Profit & Loss), and Statement of Cash Flow. This way you have record of your closing numbers and you can easily track any after-the-fact changes that occasionally happen. All the other reports should be easily accessible though your bookkeeping software, if not I’d print that as well. Printing Year end reports is a more involved process.

      As always, make sure you keep copies of your bank deposits, invoices, bills, receipts, and other 3rd party documentation supporting your bookkeeping and accounting entries.

  3. Stacy says:

    Wow. This was exactly what I was looking for. Precise and everything made perfect sense. This will be used as my month-end “bible” from this point on!! Thanks so much. Hopefully you will be available for questions as I perform my first solo month end in a few days! LOL

    1. Michelle Edwards, CPA says:

      Good luck with your first month-end close! Feel free to email me anytime, I’d be more than happy to help you out.

      Thanks,
      Michelle

  4. Laura says:

    As a first time user to Quickbooks, having been a stay-at-home mom for 10 yrs (previously an Accountant for large corporations), and just now helping a small business with all their accounting, this is a great post. Thank you!

    1. Michelle Edwards, CPA says:

      Hi Laura, Thanks for the kind words. I’m glad you found my post to be helpful. Welcome back to the accounting world! Although I strongly believe being a stay-at-home mom is the best investment you can ever make. :)

  5. Al says:

    This is PURE GOLD! Thank you so much, Michelle!

    1. Michelle Edwards, CPA says:

      You’re welcome Al, I’m glad you found it useful!

  6. Lisa Koch says:

    Your article was exactly the monthly checklist I was looking for! I am always looking to fine tune my bookkeeping and this article is really going to help. Thank you!

    1. Michelle Edwards, CPA says:

      Awe, thanks Lisa!

  7. Sharon says:

    This is great! Thank you so much for sharing!

    1. Michelle Edwards, CPA says:

      Thanks Sharon! I’m glad I was able to help. Please let me know if I can be of future assistance.

  8. Crystal Williams says:

    Thanks so much for this post! I’m moving from private to public accounting with a heavy concentration on Quickbooks and this is exactly what I needed for a guideline!

    1. Michelle Edwards, CPA says:

      Congrats on your new job Crystal! I’m glad I was able to help you out.

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