Small Business Bookkeeping: 7 Tasks to Do Every Month to Stay Organized

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Carrie Smith Nicholson

September 19, 2016  •  7 min read

Understanding the ins-and-outs of small business bookkeeping isn’t always easy. But it’s a vital part of stressing less and earning more when you’re self-employed.

Even though you can (and probably should!) hire an accountant to help manage your bookkeeping, it’s still important to understand how it all works.

Small business finances can get complicated quickly and having a good handle on what’s going on every month will give you confidence about your money.

That’s what being a smart and financially savvy business owner is all about. 

If you want to be organized and keep your small business finances running smoothly, I’ve got some tips that will help.

Here are 7 simple tasks to incorporate within your bookkeeping for small business tasks every month.

Plus, get the bonus bookkeeping checklist as a way to automate your money with ease!

1. Use simple bookkeeping software

I know, you’re probably thinking, “duh”. Yes, everyone should use some sort of bookkeeping software but finding the right one, is a whole other question.

In my five years of being a freelancer (three of which have been full-time self-employed), I’ve tested out many different accounting software.

I actually have two favorite online bookkeeping programs:


Well, together they make up an entire system of accounting that I need every month. Unfortunately, there isn’t an entire all-in-one program (that I’ve found) that will perform all of the bookkeeping tasks I need as a freelancer.

FreshBooks is used for keeping track of client data, invoices and income. Quickbooks Self-Employed is used for calculating quarterly taxes, printing financial reports and organizing business income.

And yes, I actually do recommend that you use two different programs. Keep one bookkeeping program as your main accounting software and then use another one to calculate taxes, print reports or track customer info.

You could also use a simple spreadsheet to keep track of monthly income and expenses.

Either way, it’s important to have a backup, especially if your accounting information is stored in the Cloud or online. Don’t put yourself in the position of losing all your financial information in the event you make a mistake or your program crashes.

2. Categorize business transactions

I actually review my bank accounts every single day. It’s been part of my routine since I was responsible for the bookkeeping for multiple small businesses in Texas.

It’s crazy what can happen in one day with a business bank account, so I like to know what’s happening daily.

Keep all of your business and personal bank accounts separate, including your savings accounts and credit cards. This way you’re able to organize all of your business transactions separately from your personal bills.

Even if you’re not an LLC, and are only a sole-proprietor, go ahead and open a second account at another bank and mark it for business-only transactions.

Review all of your account balances regularly, so you know how much money you have, and where it’s going.

3. Save and verify receipts

When deducting business expenses on Schedule C, you have to be able to prove that the cost was business related. The best way to do this is by saving and verifying your business receipts regularly.

There are multiple ways you can do this:

  • Capture pictures of receipts with the QuickBooks mobile app and upload them to your QBSE account.
  • Store all of your receipts in one box, file or folder to be reviewed every month.
  • Use a scanner, to save all your receipts and link them to the correct expense.

I actually save and verify my receipts the old fashioned way, with a budgeting planner and my credit card statement.

I use a business credit card for all my business purchases, because of the simplicity and the fact that I get cashback.

Every Monday morning I go through all the receipts, verify the amounts and expenses, and pay my credit card bill for the week. All receipts related to my business are put into a folder that I create at the beginning of the year.

This makes it easy to save tax-related receipts, income statements from client payments and other documents, that I’ll need when I file my taxes.

4. Perform a monthly check-in

How much did you earn from client work this week? What big expenses do you have coming up?

Take time to have a quick check-in with your business finances every week. Not so much to check in on the numbers but to see the big picture of things.

Is your income still enough to cover your bills, and pay your quarterly taxes? Do you need to move money from your business checking to your personal account to pay rent?

Verify all your bank accounts, retirement balances and your debts. Are you making progress, or do you need to hustle a bit more?

Take yourself on a weekly money date and have fun with it! Bring your favorite snack or drink, then reward yourself with some ice cream or chocolate. Just don’t underestimate this time, as it’s extremely important for keeping your business running smoothly.

5. Send invoices to business clients

A big part of freelancing is actually getting paid. But this is an often-overlooked part of bookkeeping that freelancers easily forget, or procrastinate.

It’s not always easy to talk about money, or enforcing clients to pay you for work you’ve completed. But it’s a very important part of valuing yourself and your services.

Set up an invoicing process where you bill clients on a regular basis (I do this twice a month). Then have automatic payment reminders be sent out if they are late.

Request that you be paid via PayPal or direct deposit, as those are often the forms of payment with the lowest fees, and wait times, attached to them.

Again, set aside a time during the month to bill out all of the freelance work you’ve completed so far.

Make it a date!

And don’t forget to send follow-up emails to clients who are overdue.

Making this part of your regular bookkeeping routine will allow you to feel more comfortable with asking for money, as well as increase your cash flow.

6. Set aside money for quarterly taxes

Another important bookkeeping task to do every month is set aside money for quarterly taxes. Although these are only due every quarter, your freelance business may be at a point where that tax bill is several thousands of dollars.

It’s a good idea to calculate each month instead of waiting until the end of the quarter.

I actually calculate my quarterly taxes as I receive the funds, and then verify that this amount is correct at the end of every week.

You can read more about my process in this post, but basically I just take the income I earned that week and multiply it by about 25%.

It’s also a good idea to set up weekly or monthly transfers from your business checking account to a savings account to cover this payment.

This way you won’t accidentally spend the money that’s due to the IRS. You definitely don’t want to owe them money.


7. Plan ahead for the next month

At the end of every month I perform a quick review of my financial progress and look ahead at the upcoming month.

It’s extremely difficult to plan ahead when you have irregular income, but there are things you can do to help ease the inconsistency.

  • Create monthly income and expense reports
  • Review pending payments from invoices
  • Look over your profit and loss statement
  • Calculate upcoming bills and projected income
  • Categorize all transactions in your bookkeeping software
  • Review all types of income and adjust
  • Calculate quarterly taxes to make sure you’re on target
  • Do an audit of all biz expenses and cut back
  • Keep a time journal to see how your time’s being spent

There are more ways to look back at the current month and plan ahead for the next month, but these are the basics.

Use this bookkeeping checklist during your money date this week and at the end of the month.

If you don’t feel comfortable with doing all of these bookkeeping tasks yourself, at least now you know what exactly you can outsource to a VA or qualified bookkeeper.

Start small and work these accounting to-dos into your regular business admin tasks.

You’ll be surprised how just keeping tabs on your money will really help increase your cash flow and your bottom line. The more you know about your finances, the better decisions you’ll make and ultimately be more successful.

What bookkeeping for small business tasks do you do every month? 


Bookkeeping for your small business shouldn't be complicated. There are 7 simple tasks you can do every month to stay organized and keep your finances running smoothly. Get the free bookkeeping checklist to get started!