Stay on top of your bookkeeping each month with this comprehensive checklist. Never miss critical tasks and keep your books accurate and audit-ready.

Week 1: Review & Reconciliation

• Reconcile all bank accounts - Match bank statements to your books. Look for discrepancies.
• Reconcile credit card accounts - Same process for all business credit cards.
• Review undeposited funds - Ensure all payments are properly deposited and recorded.
• Clear duplicate transactions - Check for accidentally duplicated entries from bank feeds.

Week 2: Accounts Receivable & Payable

• Send outstanding invoices - Review aging reports and send reminders for overdue payments.
• Record all income - Ensure every sale and payment is properly documented.
• Pay bills on time - Review accounts payable and schedule payments to avoid late fees.
• Track expenses - Categorize all business expenses properly for accurate P&L statements.

Week 3: Payroll & Compliance

• Process payroll - Pay employees on schedule and ensure taxes are withheld correctly.
• File payroll taxes - Submit required federal, state, and local payroll tax payments.
• Review contractor payments - Ensure 1099 contractors are paid and track for year-end reporting.

Week 4: Review & Planning

• Generate financial statements - Create P&L, balance sheet, and cash flow statements.
• Review profit margins - Compare to previous months and identify trends.
• Analyze expenses - Look for areas to cut costs or optimize spending.
• Update cash flow forecast - Project next 3 months to avoid cash crunches.
• Back up all files - Save your QuickBooks file and important documents to cloud storage.

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Cash flow is the lifeblood of your business. 82% of small businesses fail due to cash flow mismanagement. Master it with these proven strategies.

Understanding Cash Flow

Cash flow is the movement of money in and out of your business. Positive cash flow means more money coming in than going out. You can be profitable on paper but still run out of cash.

7 Strategies for Healthy Cash Flow

1. Create a Cash Flow Forecast

Project your cash position for the next 3-6 months. Include expected customer payments, planned expenses, seasonal variations, and major purchases. Update weekly.

2. Speed Up Receivables

• Invoice immediately - Don't wait until month-end.
• Offer payment incentives - Consider 2% discount for payment within 10 days.
• Accept multiple payment methods - Make it easy to pay you.
• Follow up on overdue invoices - Send reminders at 7, 14, and 30 days past due.
• Require deposits - Get 25-50% upfront for large projects.

3. Slow Down Payables (Strategically)

• If terms are Net 30, pay on day 30 (not day 10).
• Negotiate longer payment terms with suppliers (45 or 60 days).
• Use business credit cards for purchases (gives you 30+ days float).

4. Build a Cash Reserve

Goal: 3-6 months of operating expenses in cash. Start small - even $5,000 can prevent disaster. Set aside 10% of all revenue before paying yourself.

5. Monitor Key Metrics

• Cash Runway - How many months can you operate at current burn rate?
• Days Sales Outstanding (DSO) - Average days to collect payment (lower is better).
• Operating Cash Flow - Cash generated from core business operations.

6. Cut Unnecessary Expenses

• Cancel unused subscriptions and software.
• Renegotiate contracts with vendors.
• Outsource non-core functions instead of hiring.

7. Secure a Line of Credit BEFORE You Need It

Get approved while times are good. Banks are more willing to lend when you don't desperately need the money.

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Understanding which expenses are tax-deductible can save your business thousands every year. This guide covers legitimate business deductions.

What Makes an Expense Deductible?

According to the IRS, a business expense must be both ordinary (common in your industry) and necessary (helpful and appropriate).

Top Deductible Categories

1. Home Office Deduction

If you work from home, deduct a portion of rent/mortgage, utilities, insurance, and maintenance. Space must be used exclusively and regularly for business.

• Simplified Method - $5 per square foot (max 300 sq ft = $1,500)
• Regular Method - Actual expenses × (office sq ft ÷ total home sq ft)

2. Vehicle Expenses

• Standard Mileage Rate (2024): 67 cents per business mile
• Actual Expense Method: Track all vehicle expenses, deduct business use percentage

3. Meals & Entertainment

• Business Meals - 50% Deductible: Meals with clients, while traveling, at conferences
• Office Snacks - 100% Deductible: Snacks and beverages for employees

4. Office Supplies & Equipment

• Computers, printers, office furniture
• Pens, paper, postage
• Section 179: Immediately deduct up to $1,160,000 for equipment

5. Professional Services

• Accounting and bookkeeping fees
• Legal fees (business-related)
• Consulting and coaching
• Web design and development

6. Insurance Premiums

• Business liability insurance
• Professional liability insurance
• Health insurance (for self-employed)

Often-Missed Deductions

• Bank fees and credit card processing fees
• Business loan interest
• Licenses and permits
• Phone and internet (business use percentage)
• Retirement contributions (SEP IRA, Solo 401k)

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Set up QuickBooks Online correctly from day one to save time and avoid headaches later. This guide covers essential setup steps.

Step 1: Company Information

• Enter accurate business name, address, and contact info
• Select your industry - this determines your Chart of Accounts
• Choose your business structure (LLC, S-Corp, Sole Prop, etc.)
• Set your fiscal year start date

Step 2: Connect Your Bank Accounts

• Link all business bank accounts
• Connect business credit cards
• Link PayPal, Stripe, or other payment processors
• Set up automatic transaction downloads

Step 3: Customize Your Chart of Accounts

• Review the default accounts QBO created
• Add accounts specific to your business
• Delete irrelevant accounts
• Organize with account numbers (optional but recommended)

Step 4: Set Up Customers

• Import customer list (or enter manually)
• Set default payment terms (Net 30, Net 15, etc.)
• Create invoice templates
• Enable online payments if desired

Step 5: Set Up Vendors

• Add all vendors you pay regularly
• Track 1099 contractors separately
• Set up recurring bills for subscriptions

Step 6: Products and Services

• Add all products you sell
• Set up services you offer
• Include prices and descriptions
• Enable inventory tracking if needed

Step 7: Initial Balances

• Enter opening balances for all accounts
• Import historical transactions if switching from another system
• Reconcile to ensure everything matches

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Proper expense tracking ensures you maximize deductions, stay audit-ready, and understand where your money goes.

1. Separate Business and Personal

This is rule #1. Never mix business and personal expenses. Get a dedicated:

• Business checking account
• Business credit card
• Business PayPal or payment processor

2. Track Every Expense Immediately

Don't wait until month-end. Track expenses as they happen:

• Take photos of receipts with your phone
• Use apps like Expensify or QuickBooks mobile
• Email receipts to yourself or your bookkeeper
• Write business purpose on the receipt

3. Categorize Correctly

Consistent categorization makes tax time easier:

• Use specific categories: "Office Supplies" not "Miscellaneous"
• Create rules for recurring expenses
• Review uncategorized transactions weekly
• Split transactions when necessary (e.g., gas + car wash)

4. Document Business Purpose

The IRS requires documentation. For each expense, note:

• Who you met with (for meals)
• What was discussed (business purpose)
• Where the expense occurred
• Why it was necessary for business

5. Special Rules for Specific Expenses

Meals: Note who you dined with and business discussed

Mileage: Log start/end locations, miles driven, business purpose

Home Office: Document square footage and exclusive business use

Travel: Keep boarding passes, hotel receipts, and itinerary

6. Retain Receipts for 7 Years

• Store digitally in cloud storage
• Attach to transactions in QuickBooks
• Organize by month and year
• Keep backup copies

7. Review Monthly

• Run expense reports by category
• Compare to budget
• Look for unusual or duplicate charges
• Identify areas to reduce spending

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Understanding your financial statements is crucial for making informed business decisions. Here's what each statement tells you.

Profit & Loss Statement (Income Statement)

Shows revenue minus expenses over a period of time. Answers the question: "Am I making money?"

Key Components:

• Revenue - All money earned from sales
• Cost of Goods Sold (COGS) - Direct costs to produce products/services
• Gross Profit - Revenue minus COGS
• Operating Expenses - Overhead costs (rent, salaries, marketing)
• Net Income - Bottom line profit or loss

What to Watch:

• Gross Profit Margin - Should be 50%+ for most service businesses
• Net Profit Margin - Healthy is 10-20% depending on industry
• Expense trends - Are any categories growing too fast?

Balance Sheet

Snapshot of what you own and owe at a specific point in time. Answers: "What is my business worth?"

Key Components:

• Assets - What you own (cash, equipment, inventory, receivables)
• Liabilities - What you owe (loans, credit cards, payables)
• Equity - Your ownership stake (Assets - Liabilities)

What to Watch:

• Current Ratio - Current Assets ÷ Current Liabilities (should be > 1.5)
• Accounts Receivable aging - Are customers paying on time?
• Debt levels - Is debt growing faster than assets?

Cash Flow Statement

Tracks movement of cash in and out. Answers: "Where is my cash going?"

Three Categories:

• Operating Activities - Cash from day-to-day business
• Investing Activities - Buying/selling equipment or investments
• Financing Activities - Loans, owner contributions, distributions

What to Watch:

• Operating cash flow should be positive
• Declining cash despite profits = collection or inventory issues
• Cash runway - How many months can you operate?

How to Use These Together

All three statements work together to give you complete financial picture:

• High profit but low cash? Check your cash flow statement
• Growing revenue but shrinking margins? Analyze your P&L
• Strong P&L but weak balance sheet? You may have too much debt

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