Monthly Bookkeeping...What Is The Importance and How Is It Managed?

Keeping up with bookkeeping is crucial for successful businesses. Staying on top of this process is important for several reasons:

• It provides financial clarity and allows for informed decision-making regarding expenses, investments and growth opportunities.

• It ensures accurate and timely tax filings.

• It helps you maintain a healthy cash flow, allowing you to predict future financial shortfalls and take action before they become a problem.

• It can make loan and investment opportunities transpire more smoothly as clean, organized books demonstrate financial responsibility and business stability.

• It helps to prevent fraud and ensures accuracy in financial reporting, preventing costly mistakes.

• It helps ensure smoother business operations by keeping finances organized and makes payroll, invoicing and expense tracking more efficient.  This also saves time and stress when preparing financial reports or reconciling accounts.

• It provides insights into cost-cutting measures and investment opportunities, thus increasing a businesses readiness for scaling.

These are all good reasons for keeping your bookkeeping in order.  I know it can seem like an overwhelming process, but it doesn’t have to be. Here’s a simplified breakdown of monthly bookkeeping tasks:

1. Gather & Organize Documents

• Collect receipts, invoices, and bank statements.

• Store them digitally for easy access (e.g., Google Drive, Hubdoc, or QuickBooks).

2. Record Income & Expenses

• Ensure all sales and expenses are recorded in your bookkeeping system.

• Separate business and personal expenses (important for tax compliance).

3. Reconcile Bank & Credit Card Transactions

• Compare bank/credit card statements with your accounting software to catch discrepancies.

• Categorize transactions properly (e.g., expenses, income, owner withdrawals).

4. Track & Submit Sales Tax (GST/HST/PST)

• Verify that sales tax is being collected correctly.

• If registered, calculate and set aside GST/HST/PST for filing.

5. Review Accounts Payable & Receivable

• Ensure outstanding invoices are sent and payments are collected.

• Pay upcoming bills to avoid late fees.

 6. Run Payroll (if applicable)

• Calculate employee wages, withholdings, and employer contributions.

• Remit payroll deductions to CRA on time.

7. Generate Financial Reports

• Profit & Loss (P&L): Shows income and expenses.

• Balance Sheet: Provides a snapshot of assets, liabilities, and equity.

• Cash Flow Statement: Helps track where money is going.

8. Back Up Data & Check Compliance

• Ensure financial records are backed up securely.

• Confirm CRA deadlines for tax payments and filings.

While staying on top of the bookkeeping process is clearly important, not all businesses have the knowledge or the time to manage this.  Hiring a professional to handle this is an excellent way to ensure you have accurate information available when you need it. 

Book a call today if you would like to discuss how K. McLaren, CPA Ltd. can help you with this process.