Small or medium-sized business is exciting, but the books aren’t going to balance themselves. A monthly bookkeeping checklist helps do that, by giving you rhythm, minimizing errors and shining a spotlight on performance early — before problems grow. In this guide from Sharp Accounting, you’ll learn how to build a practical checklist tailored to SMEs, complete with steps, tips, and a ready-to-use flow you can implement this month.
Table of Contents
Why a checklist matters (and what makes it “monthly”)
First, a checklist turns a vague intention—“keep the books tidy”—into a repeatable system. In addition, once a month matches the rhythm of billing, reconciling bank statements, filing taxes and reporting to management. And therefore, you get cleaner data faster decisions and less surprises. Get details on Bookkeeping Services in Dubai.
The 12-step monthly bookkeeping checklist for SMEs
Use the sequence below as your baseline. Then adapt naming, owners, and deadlines to your business.
1) Collect and file the month’s source documents
Collect sales invoices, purchase bills, expense receipts, credit notes and use petty cash slips or bank statements. Then by month and category — digital folders or your accounting platform’s shared document vault. Because consistency prevents gaps later, assign a single owner and due date (e.g., “by the 2nd business day”).
2) Reconcile every bank and cash account
Download statements for checking, savings, credit cards, and mobile wallets. Then reconcile each to your ledger balance. Investigate unmatched items immediately; usually they’re date timing, double entries, or forgotten fees. As a result, your cash flow reports stop lying.
3) Review sales and accounts receivable
Now, A/R aging report it. Flag past-due invoices by bucket (0–30, 31–60, 61–90, 90+ days). Then follow up — or delegate reminders to an automated system — so cash continues to move. Additionally, confirm that tax on sales (e.g., GST/VAT) posted correctly and credit notes offset related invoices.
4) Review purchases and accounts payable
Pull the A/P aging. Compare to supplier statements to catch missing bills or duplicate entries. Where possible, schedule payments to optimize discounts and cash buffer. Furthermore, tag expenses with the right category to keep gross margin and overhead accurate.
5) Process payroll and related liabilities
Confirm gross pay, bonuses, benefits & withholdings. Post payroll journals & reconcile employer taxes, retirement contributions & other statutory—deductions. If your jurisdiction requires, prepare remittance filings. Therefore, you avoid penalties and your staff gets paid correctly—on time.
6) Record fixed assets, depreciation, and disposals
Capitalize qualifying equipment and software, attach invoices, and assign useful life. Then book monthly depreciation. If you sold or scrapped assets, record the disposal and gain/loss. Consequently, financial statements reflect reality instead of wishful thinking.
7) Verify inventory and cost of goods sold
If you carry stock, run a stock valuation and investigate negatives or stale items. Adjust for shrinkage or write-downs where needed. Moreover, reconcile COGS to purchasing and production records so margins remain trustworthy.
8) Accrue expenses and amortize prepayments
Look for bills that relate to the month but haven’t arrived—utilities, marketing retainers, or interest. Accrue them. Likewise, spread prepaid expenses (insurance, subscriptions) over the service period. Thus, you follow matching principles and smooth out spikes.
9) Confirm tax positions (GST/VAT, withholding, income tax estimates)
Check GST/VAT collected vs. input credits; reconcile to returns. Review withholding on contractor payments where required. If you pay quarterly or monthly income tax estimates, update the provision. As a result, tax season becomes a formality, not a fire drill.
10) Close revenue and expense accounts, then draft financial statements
Lock the period after reviews. Produce the profit & loss, balance sheet & cash flow statement. Because these reports power decisions, include prior-month & year-to-date columns. Additionally, annotate unusual—variances.
11) Review KPIs and cash runway
Translate the numbers into insight. For most SMEs, track: gross margin, operating margin, days sales outstanding , days payable outstanding , inventory turns & 3-month cash runway. Therefore, leadership can act—renegotiate terms, throttle spend/accelerate collections.
12) Backup, document, and plan next month
Export ledgers and reports to secure cloud storage. Note unresolved items and assign owners. Finally, update your checklist with any improvements learned this month. Continuous refinement keeps the process lightweight and resilient. Looking for a Bookkeeping Services in Ajman?
A simple monthly checklist template
- Documents gathered & filed (Due: Day 2)
- Bank, card & wallet reconciliations completed (Day 3)
- Sales & A/R aging reviewed; overdues chased (Day 4)
- Purchases & A/P aging reviewed; payments scheduled (Day 5)
- Payroll posted; liabilities reconciled (Day 6)
- Fixed assets updated; depreciation booked (Day 6)
- Inventory checked; COGS tied out (Day 7)
- Accruals and prepaids adjusted (Day 7)
- GST/VAT and other tax reconciliations (Day 8)
- Financial statements generated (Day 9)
- KPIs & variance analysis completed (Day 10)
- Backup & roll-forward tasks set (Day 10)
Make it stick: process, not heroics
Although expertise matters, process wins. Therefore:
- Standardize naming. Use “YYYY-MM” prefixes on folders, files, and journal entries.
- Automate inputs. Bank feeds, OCR for bills & recurring journals reduce keystrokes & errors.
- Batch work. Reconcile all banks in one sitting; then clear A/R; then clear A/P. Context switching kills accuracy.
- Set calendar reminders. The best checklist is the one you actually open.
- Separate duties where possible. One person posts, another reviews. Even in a tiny team, a second pair of eyes catches a lot. Get details on Bookkeeping Services in Sharjah.
Common mistakes SMEs can easily avoid
- Skipping reconciliations because “the feed is connected.” Feeds speed data entry; they do not guarantee correctness.
- Treating loans, owner’s drawings, or capital injections as income. Consequently, the P&L gets distorted.
- Ignoring prepaids and accruals. Without them, profitability whipsaws month to month.
- Filing GST/VAT from a dashboard without reconciling to ledgers. That’s how penalties happen.
- Waiting until quarter-end. Monthly cadence keeps pain small and signals fresh.
Tools that help (choose what fits)
- Core accounting software with document capture
- Bank feeds and statement fetchers
- A/R reminder tools and online payment links
- Inventory modules for valuation and reorder points
- Simple KPI dashboards (spreadsheets still work—consistency matters more than flash)
Sharp Accounting can support you in creating the flow, mapping your chart of accounts and tailoring the monthly bookkeeping checklist to your industry — manufacturing, services, e-commerce, hospitality or nonprofit.
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Simplifying Monthly Bookkeeping for SMEs
Start simple. Let’s adopt the 12 steps above, assign owners and due dates. Then, tweak the checklist every month based on what caused you to slow down. Soon, you’ll enjoy timely numbers, calmer audits, and stronger decisions.
If you’d like help tailoring this monthly bookkeeping checklist to your industry or software stack, Sharp Accounting can streamline your flow, implement bank reconciliation best practices, and build the KPI pack that leadership will actually use.
FAQs — How to Create a Monthly Bookkeeping Checklist for SMEs
Bookkeeping records and organizes the transactions, accounting interprets them as financial statements and advice. In smaller teams, one person may serve both roles, but the two are still separate.
With a clean process, 5–10 business days is reasonable. However, once your checklist matures and automation increases, you can close in 3–5 days.
If you invoice customers or carry inventory, accrual gives a truer picture than cash-basis. Moreover, lenders and investors usually prefer accrual reports.
At minimum: profit & loss, balance sheet, cash flow statement & A/R & A/P aging. Additionally, keep a reconciliation report for every bank & card.
Weekly is best. Furthermore, automate reminders and offer easy payment options to reduce DSO.
Always reconcile to the official statement. Then import missing entries or post manual journals. Consequently, your cash ledger matches the bank.
Record them as owner’s contribution (equity) and tag the correct expense category. Alternatively, reimburse through payroll or expense runs.
If it creates a long-term benefit (e.g., equipment, major software), treat it as a fixed asset and depreciate. Otherwise, expense it. Set a capitalization threshold and follow it consistently.
Focus on utilization, billable rate, gross margin, operating margin, DSO, and monthly recurring revenue (if applicable). Additionally, watch cash runway.
Reconcile tax collected vs. input credits, tie to the return, and keep the working papers. Therefore, filings match ledgers and audits go smoothly.
