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Anonymous
Not applicable

Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

Checklist.png

 

 

Bookkeeping checklists are an important tool for staying organized. Checklists remind you to regularly update your data, and they help you avoid missing deadlines and making costly accounting errors.

 

If your build monthly checklists into your QuickBooks routine from Day 1, your accounts will be accurate year-round. And while there’s probably no such thing as a “stress-free tax season,” consistent account-maintenance likely means fewer “surprises” come tax time – which may help you keep your blood pressure down!

 

Mathew Fulton (@ParkwayInc), co-founder and CTO of Ventura-based bookkeeping firm Parkway Business Solutions, created a rigorous checklist for reviewing your accounts at the end of every month. His list of Monthly-Close Tasks guides you through transaction-level details, long-term business trends and everything in-between, so you know exactly where your business stands every 30 days.

Set aside 30 minutes at the end of each month to sit down, brew up your beverage of choice and run through Parkway Inc’s checklist so you can flip to the next page of your calendar with confidence.

 


 

Mathew Fulton and Parkway Inc’s Monthly-Close Tasks:

 

 Transaction Level Review:

  • Review Uncategorized Expenses
  • Review Revenue Query Account (Fancy word for Uncategorized Income - so we can use Bank Rules)
  • Reconcile Bank Statements 
  • Clear old transactions from the Bank Center feed
  • Review Pending Transactions

 

 

 Reporting Review:

  • Pull a Profit & Loss Report By Month and review for abnormal monthly totals
  • Review Negative Amounts of Profit and Loss for the period:
    • Expenses:
      • Review COGS Expense Detail
      • Review Ordinary Expense Detail
    • Assets:
      • Review the current month current asset detail
      • Review the current month other current asset detail
      • Review the current month fixed asset detail
      • Reconcile Specified Current Asset/and Other Current Asset accounts
    •  Account Reviews & Reconciliations:
      • Review Accounts Receivable
      • Review Accounts Payable
      • Review Cash On Hand
      • Review and close out all clearing accounts

 

                                 

 Payroll & Contracted Labor:

  • Verify gross employee wages
  • Verify employer has paid payroll tax
  • Reconcile payroll liability account
  • Review Contract Labor
  • Generate Workers Comp reporting
  • Loans and Notes Payable: ensure notes and loans payable are tracked correctly               

 

 

 Closing & Reporting:

  • Complete month-end closing entry
  • Complete month-end reporting
  • Create month-end closing date

 


 

Special thanks to Mathew Fulton and Parkway Business Solutions for helping our community members feel comfortable with bookkeeping -- and approach it as one more essential part of business operations.

 

 

Now it’s your turn

 

What kind of checklists do you use to keep your business running smoothly? Share your best practices on the business acumen community discussion boards!

8 Comments
ProAdvisor

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

This is a wonderful list and like Matthew says, you can save yourself so much time at tax time by doing this every month.

 

I also like to review my Profit and loss and compare a similar prior period.  Balance sheet too. One of my favorite tools in QBO is creating scheduled reports.  I set them to email to me monthly.  That way you won’t miss a month!

Level 15

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

@Anonymous

 

Closing & Reporting:

  • Complete month-end closing entry

 

What does this mean in real terms, what is being done in other words in QB?

 

 

ProAdvisor

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

Well, I am certainly not @Anonymous or Matthew but I will try to answer this.  

 

Sometimes at month end (depending on the business) you close out using specific entries.  For example, some businesses that I work with, I book in a monthly journal entry to move funds from prepaid expense to the actual expense.  Like insurance that may have been booked to prepaid.  So once per month, I move the monthly amount to the insurance expense.  You may have to do that for work-in-process for construction firms.  Maybe the payroll is accrued and you need to enter that.  There are many scenarios that would require a monthly closing entry.

 

If I am wrong, please jump in here, Matthew. But that was my interpretation of the article.  I wish more people followed these steps monthly. It would give a far better accurate picture of the business finances.  

 

ProAdvisor

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

Hi Rustler,

 

You will have to excuse how vague that may have come across, there were additional conversations where we discussed this in more detail, but I think I forgot to translate that information into the text format as well.

 

While designing our monthly workflow process, we developed a series of reports that go step by step through closing out the equity section of the file each month.  For example, we run a specific report to check if our clearing account has a remaining balance that need to be converted to an investment or distribution activity.  Then the next report checks if there were additional investments in the same period that should be used to offset any distributions. This process continues with each step providing the total that is entered into a memorized transaction and saved. Once that transaction is saved, the next report is opened, and that total provides you your next step.

 

Appreciating your knowledge of accounting, I hope that my somewhat vague answer helps provide more clarity to your question.

  

 We have found using apps like Process Street help us improve our own workflow through the creation of recurring checklist templates:  Below is a link to one that I am currently adding screenshots and explanations to.

 

Parkway Weekly Update List

 

Parkway QuickBooks Desktop File Review

 

Level 15

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

@lynda

 

That makes sense, thanks for the clarification, I usually do that kind of posting automatically around the 5th of the month (recurring journal entries) just makes it easier for me as opposed to month end.  As a result I never considered that might a month end kind of thing for some.

mea culpa

 

@ParkwayInc

 

Sorry for nit picking, but it just struck me as odd, since QB is perpetual accounting as opposed to the old journal type of closing.

Between you and Lynda, I see where you are coming from,. thanks.

Anonymous
Not applicable

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

@Rustler, your perspective makes sense. Though, even with perpetual tasks (not just accounting), one should take the time to regularly pause and review? 

Level 15

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”


@Anonymous wrote:

@Rustler, your perspective makes sense. Though, even with perpetual tasks (not just accounting), one should take the time to regularly pause and review? 


Oh I do, it is just the concept of waiting till the end of the month that threw me, and I wasn't clear on what you meant.  I like the 5th cause every month has that date {smile} and rents are due in NLT the 5th, and I watch the P&L during the month too.  So I like to see fixed costs already there.

 

I do the same for automatic transfers to business savings

Level 7

Re: Parkway Inc Says: “Monthly-Close Checklists Keep Your Books in Shape, Year-Round”

I agree recurring entries are good to do on the 5th or 25th to keep out of the way of the month end close.  I say 25th for those items that are not technically earned till EOM like PTO accrual, etc.  Most of my clients I setup with semi-monthly payroll paid on those dates also, since all are required to submit timesheets for PPE 15th and EOM, that allows enough days to process payroll and reconcile before payroll is actually paid so if any corrections are needed, you can fix before actually paid.

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