Monthly Bookkeeping Checklist: 9 Reports to Review Regularly

Original photography posted at Unsplash by LinkedIn Sales Solutions.

Original photography posted at Unsplash by LinkedIn Sales Solutions.

Original article posted at Design Manager.

While you’d probably love to focus on design all day, the reality of running an interior design firm means that there are other important tasks that need to be addressed to operate effectively. Like bookkeeping. Staying on top of your financials is imperative to running a successful small business, and that means regular check-ins on various statements that will give you a clear and consistent picture of your firm’s financial health.

From reconciling to reviewing payroll to following up on unpaid invoices, what should be on your monthly bookkeeping checklist?

Review Your Cash/Bank Card Statements

Be sure to review your bank and credit card statements to ensure all of your recent transactions look accurate. “I like to tell people to look not only at financial statements in your software, but also at paper statements from your bank,” says Peter Lang, CPA, and owner of The Designer CPA. “This is to ensure that what’s actually going through the statements is a legitimate business, not just what the accounting person is putting into the software. I’ve seen fraud happen this way.”

Balance Sheet

Get an overall view of your firm’s assets and liabilities with the Balance Sheet report. What do you own and what do you owe? Has your financial balance changed significantly from last month? Dig a bit deeper and find out why that is if you’re seeing a change that you didn’t anticipate.

Profit/Loss Statement

Review your revenue and expenses with this report, also known as the Income Statement. Is your firm profitable? Compare to the previous month and previous year to identify if you’re on track with a projected budget.

Accounts Receivable

Are your clients paying you on time? You won’t know unless you look at the accounts receivable report. After reviewing it, send out any reminders that need to go out.

Accounts Payable

Make sure the bills you’re paying for your business have been paid on time and are accurate with this report. Address any incorrect or uncategorized transactions to ensure your net income is reported accurately.

Open Client Deposits

This report shows deposits on proposals and retainers received from a client but not yet applied to an invoice. “I suggest that people check the Accounts Receivable report and Open Client Deposits report together and make sure that if a client owes money on an order or a time bill, that those invoices go out and they’re getting paid,” says Lang. “Or if a client already made a payment as a retainer or on a proposal that’s open, make sure someone’s closing that out to an invoice. When you’re looking at these reports, not only does it reflect your current income, but it reflects a project’s current status.”

Open Vendor Deposits

Similar to the Open Client Deposit report, this report shows vendor deposits on project and inventory purchase orders that have not yet been applied to an invoice. Ensure that orders are being fulfilled by the vendor and that your recorded costs are accurate.

Pre-Billing Summary

Using this report regularly is a really good way to stay ahead of invoicing, suggests Denise Zollo, owner of Zollo Accounting & Tax Services LLC. After reviewing it, you’ll know what money you need to collect from clients and what needs to be invoiced and closed out for income recognition purposes.

Work in Process

Drilling down more from the Pre-Billing Summary, this report helps you monitor each project while it’s happening and ensures that you invoice a client fully for each piece of merchandise purchased, including additional fees like shipping.

 
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