A No-Nonsense Monthly Bookkeeping Routine

If you’re like me, monthly business bookkeeping is one of your least favorite chores, but it’s an important part of running a business. After too much tax time stress I decided to create a routine for my business accounting, and today I’m sharing it with you! You’ll learn my quick and easy tips for tracking income and expenses, tax organization ideas, and tricks for storing important business documents when you work at home. Don’t miss this simple, no-nonsense monthly bookkeeping routine that will make tax time a breeze!

A No-Nonsense Monthly Bookkeeping Routine

You don’t have to dread bookkeeping for your small business any longer. By completing a few simple steps on a monthly basis, you can stay on top of your business accounting and enjoy a relaxed, stress-free tax season!

After several years of finding myself with my head in my hands bemoaning my lack of tax organization, I decided it was time to get a business routine in place. The monthly bookkeeping routine that I’m sharing with you today has been tweaked and perfected over the past three years, and tax time is now a breeze.

Okay, maybe not a breeze….

But it’s definitely a faster process and much less stressful.

Let’s jump into the steps for this no-nonsense monthly business bookkeeping routine!

The Process: An Overview

Here are the main items we’ll cover in today’s post:

Document Gathering – in case you’ve been without a bookkeeping routine for awhile (been there, done that).
Sorting Your Documents – to make this routine simple and easy.
Tracking Income & Expenses – so you always know where your business stands financially.
Other Tracking to Complete During this Process
Financial Goal Setting – this is a great time to complete this task every month!
Storing Your Documents – so you always know where to find your documents, no matter what phase of your process they’re in.

This may sound like a lot, but now that I’ve been completing this business routine monthly for years, it takes me less than an hour (and sometimes closer to 30 minutes, depending on the number of items I have to log). Time well spent for financial peace of mind!

Before we go on, please keep in mind that:

Information in this post and on this site is provided for general education purposes. It is not intended to be relied upon as legal, accounting, or tax advice. Please consult your tax professional for specific information regarding your situation.

Now, on to the steps!

#1 Gather Your Documents

In this step we’re going to round up all of your business financial documents: receipts, W-2s, bills, invoices, etc.

We’re also going to create a mini routine for dealing with these documents as they come into your office, so that you never have to go hunting for them again.

If this is the first time you’ve rounded up your financial documents in awhile, here are a few tips on where your docs might be hiding out:

If you have an inbox in your office, check it.
Open any pieces of unopened mail.
Check your wallet, purse, and/or briefcase for any financial documents, especially receipts.
If you have any files where you might have stashed receipts or other financial documents, check them.
Check your email inbox and any applicable folders. Because I do so much online, I always have a lot of documents in my email inbox and biz financials email folder.

*This is a good time to create a “pre-logging” routine, so that you never have to search for documents, financial or otherwise, again.

Here’s my “pre-logging” routine as a starting point:

Every paper item that comes into my home office goes into my inbox, which sits on the corner of my desk. It’s my catch-all clutter filter!

My husband and kids know that if they have papers for me, they go in my inbox (unless they have a deadline, then they hand them to me or put them on my computer).

I process my inbox on a daily or weekly basis, depending on the number of items in it. Any financial documents in my inbox go into a hanging folder in my tickler file labeled “[Year] Taxes.”

I HIGHLY recommend that you try using an office inbox, if you don’t already have one. This one organizational tool has saved me so. much. time.

By completing these two steps in my “pre-logging” routine, all I have to do when I’m ready to complete my monthly business bookkeeping routine is pull out that folder and everything I need is right there!

You can learn more about setting up and using a home office inbox in this post: 3 Essential Routines for Home Office Organization.

Learn more about how I process the paper clutter that enters my office in this post: How to Develop a Paper Processing Routine.

A note on digital documents: I have a business financials folder in my email account, too. Any time a financial document pops up in my email inbox, it goes directly into that folder. And I have a similar folder in Evernote, so that documents that I download as PDFs go straight in there.

#2 Sort Your Gathered Documents

The next step in this routine is to sort your documents.

I’ve found it most effective to sort my documents into two categories, income and expenses. Then I arrange the items in each category chronologically, oldest to newest.

Want to sort and organize ALL of your paper piles? Check out this post to get started: The First Step to Conquer Home Office Paper Clutter.

#3 Log Income

Now, your’e going to log all of your income.

I like easy and uncomplicated, so I do this within a spreadsheet with the following columns:

Payment Type – check, PayPal, etc.
Transaction/Check Number
Date
Income Source
Service/Product
Amount
And total year-to-date income

If your business is more complex or you have many income sources and lots of income to log (go, you!), then it might be easier for you to use small business accounting software like QuickBooks or FreshBooks.

Check out this post from The Balance Small Business for more small business accounting software options.

#4 Log Expenses

Next, you’ll repeat the logging process with your expenses.

My spreadsheet columns for expenses are similar to those for my income, but with one difference that feels like magic when tax time rolls around:

Payment Type
Transaction/Check Number
Date
Purchase
**Category
Amount
Year-to-Date Total

Don’t skip categorizing your expenses. That’s where the tax time magic happens!

By categorizing your expenses, you can sort by the category column then use the Sum formula to add up the amount in each category. Then it’s simply a matter of transferring them to your Schedule C!

Here are a few of the categories I use regularly:

Client (I include the name of the client)
Computer
Education
Fees
Legal
Office Supplies
Marketing
Professional
Website

*Not all of these are deductible or fully deductible. This is where you’d want to consult your tax professional!

#5 Complete Mileage Tracker

If you drive your car for work, track your business mileage throughout the month, quarter, or year (depending on your tax filing frequency).

This is a great time to add up your totals and file your tracker with your other tax documents.

#6 Update Any Financial Worksheets, Evaluate & Set Goals

This is also a great time to complete any other financial worksheets you use and to evaluate last month’s financial goals and set goals for the new month! .

#7 Store Documents

The final step in this no-nonsense monthly business bookkeeping routine is to decide how and where you’ll store your monthly financial documents after they’re logged.

I keep my paper documents in the tax folder I mentioned earlier, which is stored in my tickler file. I also have a lot of digital documents that I keep in Evernote.

Here are a few options to get you started. But make sure you find a storage system that works for YOU!

This post contains affiliate links for your convenience. Click here to read my full disclosure policy. As always, my favorable opinion of helpful office organization supplies are 100% my own. I only recommend products that I use and love.

You could store your financial documents:

In one big envelope for the year or in smaller envelopes organized by the month
In an accordian file
Digitally in Evernote, Dropbox, Google Drive, or another cloud-based program
In a hanging folder
In a binder

There are hundreds of different options, so try one then tweak it until it works for you and your needs.

For more ideas on storing tax documents, especially receipts, check out this post: 7 Easy Ways to Organize Tax Receipts.

The rule here is: one place ALWAYS!

Make sure your financial documents all end up in the same place so that you can always find them when tax time rolls around.

And that’s a wrap on the no-nonsense monthly bookkeeping routine. Make this business routine a part of your regular monthly schedule, and you’ll be able to say good-bye to tax time dread. By completing these few simple steps, you’ll be more organized, always know where your important financial documents are, be on top of your business accounting, and enjoy a relaxed, stress-free tax season!

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A No-Nonsense Monthly Bookkeeping Routine