Bookkeeping Checklist | Incite Tax

A checklist for bookkeeping. What does that look like? First of all, we recommend that you update your books no more than once a week. More than once a week is just a lot of unnecessary effort. We follow the Profit First system, so a lot of our clients and a lot of our recommendations also will fall into Biweekly, so every 2 weeks there's some stuff you want to be doing. But so let's start with kind of the weekly/biweekly things that we recommend. First thing, you want to record your income and expenses. Again, if you're doing it weekly, no more than weekly, or twice a month. After those are entered, go ahead and review your expenses. We want to be looking for things That are helping you get clients or keep clients. If it's not doing one of those 2 things, you really need to consider cutting that expense. And by doing this on a consistent basis, you will be able to catch the frequent or the, the most recent expenses so that you have an idea of what you're spending money on and what's necessary, not necessary. You also want to in turn pay your bills at this time, again, weekly or biweekly. Record and send invoices. Reconcile your bank and credit card accounts. Now this is one of those where you theoretically could do it once a month, but it does need to be on your checklist. Go ahead and scan any other receipts that you might have received during the last period so that you're looking at those weekly or biweekly. And then updating your vehicle mileage tracker. The purpose of this video isn't to tell you about how to write off your car, but we have a lot of that material, so feel free to check out our blog. But update your mileage tracker as well. That needs to be on your bookkeeping checklist. And then depending on the cycle of your payroll, that could be weekly, it could be biweekly, or it could be monthly, but entering your payroll information should be on your checklist as well. Now let's go to monthly tasks. You want to follow up with any past-due invoices. You want a system to stay on top of this. You did the work, that's why you sent out the invoices. Clients need to pay you. You also want to review your overall cash flow. Now, if you're following the Profit First system, you would be doing this on what we refer to as allocation days. Days that you're sitting down, which could be weekly, could be biweekly, but again, reviewing your cash flow is super important. You'll be able to pick up trends and realize when you need cash, when you don't need cash, when is a good time to make purchases, that type of thing. That's why it's on your checklist. Also, once a month, go ahead and sit down and review your profit and loss statement. Look at it for the current month, look at it from a month-by-month basis to see if there's maybe any trends that are going on. And then you should have some sort of key predictive indicator that you're using at least once a month. Depending on the size of the business and the KPI, you might want to be managing those a little bit more frequently, but it needs to be on your checklist. You— there's not really the wrong— a right or wrong answer as far as frequency on some of those items. Once a quarter, If you are making estimated income tax payments, you're going to want to send off those payments once a quarter. Depending on how you have payroll set up, if you're doing it yourself and filing forms, you'd be filing quarterly payroll forms as well. And then once a year, make sure you get those W-2s issued. If you have 1099s, get those issued. It's important to get your books Like clean. Accountant— in the accounting world, we call it the year-end close. But there might be some things you need to adjust on your books, like loan balances. You want to check those to make sure they're accurate. So there's those types of things. You only do that once a year. That'll get your books ready to help your accountant file your tax return. And then of course, as part of the tax filing process once a year, you want to get all the other documents you get in the mail that are going to be needed to file your taxes. So that is a brief summary of a checklist for bookkeeping. If you'd like a handout and these, these things that we're recommending on the checklist, feel free to download those at your convenience. And remember, the IRS doesn't care about you. They're really finding ways to try to screw you over.