The Small Business Monthly Bookkeeping Checklist (DIY Month-End Close)

1. Gather everything from the month

Before touching your software, collect bank and credit card statements, loan statements, receipts for anything over your comfort threshold, payroll reports and any invoices you sent or received. Downloading statements as PDFs into one monthly folder saves hours later.

2. Categorize every transaction

Work through your bank feed and assign each transaction to the right account in your chart of accounts. Don’t let items pile up in Uncategorized Expense — a large balance there means your profit number is guesswork.

Watch for the classic traps: owner withdrawals recorded as expenses instead of an owner’s draw, loan payments booked entirely as expense (only the interest is), and transfers between your own accounts counted as income.

3. Reconcile every bank, card and loan account

A bank reconciliation matches your books to the statement balance. Reconcile every checking, savings, credit card and loan account — not just your main bank account. If you can’t get to a zero difference, look for duplicates, missing transactions and amounts entered with transposed digits.

4. Review receivables and payables

Run an aging report for accounts receivable and follow up on anything past due. Then review accounts payable so you know what’s coming out next month. In QuickBooks, also check that Undeposited Funds is near zero.

5. Record adjusting entries

Some things don’t come through a bank feed: loan interest splits, depreciation, prepaid expenses and payroll liabilities. These go in as journal entries. If you’re unsure of the treatment, write down the question for your CPA rather than guessing.

6. Review your financial statements

Run your profit and loss and balance sheet. Compare this month to last month and the same month last year. Anything that jumps out — an expense that doubled, negative balances, a liability that never goes down — is usually a bookkeeping error worth investigating.

7. Close the period

Set a closing date in your software so nobody accidentally edits a reconciled month. Then file your statements in the monthly folder.

• All transactions categorized
• All bank, card and loan accounts reconciled
• AR and AP reviewed; Undeposited Funds cleared
• Adjusting entries recorded
• P&L and balance sheet reviewed
• Books locked with a closing date

How long should this take?

For a small service business with a few hundred transactions, an experienced bookkeeper might close a month in a couple of hours. Owners new to the process often spend much longer. If month-end is consistently eating your weekends, that time has a real cost — see the numbers on our small business bookkeeping statistics page.