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Doing your own bookkeeping? Follow our 10 basic bookkeeping checks to make each month to keep your books in good shape.

This blog is written with the person in mind who is doing their own bookkeeping or has an untrained member of staff doing their bookkeeping for them.

As bookkeepers ourselves, we are often asked to do what we call ‘rescue’ jobs where the bookkeeping has perhaps got behind, gone wrong or is in a bit of a mess.  Sometimes months have gone by before it is realised that there is a problem – sometimes identified by the business owner or sometimes by their accountant.  We therefore thought that providing a basic checklist which any business owner could use to make sure things are basically on track every month and could help some of those businesses avoid the pitfalls.

So here goes with the checklist:

Have you entered everything?

  • Sales
  • Purchase invoices
  • Receipts
  • Expenses & mileage claims
  • Petty cash
  • Stock adjustments

Make sure everything for the month has been entered or your profit & loss account will not show a true picture of your business.

Some make the mistake of only showing what they have paid. It needs to be all the documents dated for the month you are working on.  So, if you have an invoice dated March but not paid until April, you should enter this in March. A profit & loss report works on an accruals basis i.e invoice date not when paid.

Is everything coded correctly?

If you are using a bookkeeping software, you will be allocating all your sales or purchases to a nominal code. The nominal code is basically the category of the income of expenditure and it is important to get this correct so that your profit & loss account and balance sheets reflect what is really happening in your business. You will want to use your profit & loss to make decisions about how you operate your business.

So, at the end of the month, run a transaction report by nominal code and look through it to check that you have coded things correctly.

Avoid putting purchases to a general expenses account or miscellaneous expenditure account. These will need to moved at the year end anyway – be more specific and allocate them to the most appropriate nominal code. You can always create specific new nominal codes if required, the existing COA’s may not be set up for the type of business you are working on and may be missing essential categories.

Do your accounts reconcile?

  • Bank accounts
  • Credit card accounts
  • PDQ control accounts
  • Sales channel accounts

By ensuring all your accounts reconcile at the end of every month, means you have entered all the income and expenditure from those accounts in to your financial accounts.  It is often the time we will find if we have missed something or duplicated something and so we can simply correct this.

Whether you are doing this manually or in a bookkeeping software, make sure that the total at the end of each month on your statement matches what you have on your bookkeeping system.

If you are using a system with an automatic bank feed into your bookkeeping software, the process is so much easier. You do still need to check it matches with the final balance on a physical statement or online banking as sometimes the bank feeds can miss a few lines.

Have you claimed everything you can?

Sometimes you may not be sure what you can claim for your business so ask your bookkeeper or accountant what is typical for your type of business.  There may be things which you can justify as business expenses which you may not have thought about and you just pay for personally.

Identify the key things you can claim in your business and add them to this checklist for future use.

Make sure you review your bank statement on your personal account each month – did you buy things for the business which you should claim back as expenses?

We see so many businesses who don’t claim the business mileage done in their personal vehicle.  Complete a mileage claim form and claim back the mileage from the business as it’s money you can claim back from your business waiting to be claimed back.

Have you checked and reconciled your VAT and paid it?

This is something which you can do quarterly rather than monthly if you prefer, as long as it is done prior to the submission of the VAT return.

If you are using a bookkeeping software, for every entry you have put in, you will have made a decision as to whether VAT can be claimed or not.  We all make mistakes and it is important before the VAT return is submitted to check the VAT – most bookkeeping software’s have a VAT audit report which allows us to see all the data behind the VAT return, where VAT has been charged to customers and where VAT is being claimed.  So running this report and checking it thoroughly is really important.

Make sure that if you don’t have a VAT receipt or invoice, you don’t claim the VAT back. If the paperwork is later located, you can go in and amend the transaction and claim the VAT back on a later vat return as a late claim.

It is also important to ensure that you reconcile the VAT with the figure on the trial balance as at the end of the month. Your accountant will be ensuring this is the case at year end and by checking this every quarter it will avoid your VAT getting out of shape.

It is of course important to hit the VAT submission deadline which is the 7th of the month and to ensure that it is also paid by this date.  If you set up a direct debit for your VAT, you won’t need to worry about making sure you have paid it by the due date.

Have you checked the wages and PAYE?

To ensure that the amount you have paid your staff aligns with the what has been processed through the payroll, run a transaction report in your software for net wages at the end of the month you are working on and ensure this is zero. If it isn’t it suggests that you have either under or overpaid a member of staff and it needs to be corrected.

To ensure that you are up to date with your PAYE (which have to be paid by the 19th of the following month), log on to the HMRC website and ensure payments are up to date. In your software, run a transaction report for PAYE and at the end of the month this should show only the amount which is outstanding from the months payroll and is due by the 19th of the following month.

Do you know where the cash is?

For cash businesses (shops & Online businesses), it is really easy to lose track of cash. Perhaps you buy things for the business out of the till or pay staff cash. Perhaps you have a petty cash float. So it’s really important to keep receipts and invoices for everything you have paid for in cash.

It is advisable to run a cash register control account to show all the cash movements.

At the end of each month, check and record the amount of cash you hold in your till/s. If you have a petty cash account, ensure this is all recorded on your system and that the amount in the float tallies with your records.

This is really important as HMRC inspections tend to put a strong focus on cash. You also need to know that you are accounting for it properly throughout the year so that you don’t get any nasty surprises at the year end. We have seen many situations where the accountant has had to allocate the spend to the business owners as personal expenditure because they haven’t been able to show it has been spent in the business.

Have you checked your stock?

This will only of course apply to businesses who hold stock and the approach to this may also depend on what has been agreed with your accountant.

So that’s the first step – find out from your accountant what they recommend you do about recording your stock. If you have a stock management system, a monthly adjustment in your accounts may be appropriate. Alternatively, an annual stock check on the last day of the financial year may be sufficient.

Have you checked your debtors and creditors?

In your software, you will have the ability to run both a debtors and creditors report at the month end.

Firstly, run your creditors report. This is a list of all the suppliers you owed as at the end of the month you are working on. Check through each item and identify if there are any items which are old, incorrect or no longer applicable and should be credited off the system.   Check to see which of these invoices you still need to pay and plan when you will pay them. If you pick up any errors or duplications here, you can deal with these at this stage too.

Then run your debtors report. This is a list of all the invoices you have raised and who were unpaid to you at the date of the report you have run. Check through each item and check if there are any invoices which are no longer applicable or need to be written off to bad debt. For those that remain, check that you have either now received the payments or have taken steps to chase the customers for payment.

Have your reviewed your profit & loss

So everything you have entered up to this point culminates in the production of your profit & loss  & Balance Sheet report which shows you a financial picture of your business.

Firstly, do a basic check to make sure there are no obvious omissions. For example, if you see a rent payment missing for one or two months, it suggests that there is an oversight that needs correcting. It may be showing as three months rent in one month on the P&L and needs splitting out over the quarter.

Then look through and compare the figures for the month on each nominal against previous months – is it significantly higher or lower and, if so, what is the reason for this?

Look for themes and issues within your P&L as they tell a story about what is happening in your business.


This list of course is not exhaustive as all businesses are different and have different requirements. However, if you can do these 10 basic checks each month it will help to ensure that your bookkeeping doesn’t get out of shape and it will avoid you getting any nasty surprises following the year end work being done by your accountant. The last thing you want is to find that your business isn’t in as good a shape as you thought.

I understand that bookkeeping isn’t everyone’s top priority or something they are keen to do in their business. We often meet business owners too that appreciate having some bookkeeping training to help to reassure them that they are doing it correctly. At The Bookkeeping Department, we provide bookkeeping set up, support, training and bookkeeping rescue packages and so if you feel that this would be of help to you, you are more than welcome to get in touch with me and have a chat –