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Bookkeeping & Record-Keeping Checklist

1. Set Up Your Bookkeeping System

  • Choose a method:
  • Cash basis (record income/expenses when paid)
  • Accrual basis (record when earned/incurred)
  • Select tools:
  • Spreadsheets (Excel/Google Sheets)
  • Accounting software (QuickBooks, Xero, FreshBooks)
  • Chart of accounts: Create categories for income, expenses, assets, and liabilities.

2. Track Income & Expenses

  • Record all revenue: Sales, invoices, and other income (date, amount, source).
  • Categorize expenses:
  • Operating costs (rent, utilities)
  • COGS (cost of goods sold)
  • Payroll, taxes, and professional fees
  • Save receipts: Use apps like Expensify or Shoeboxed for digital copies.

3. Manage Invoices & Payments

  • Issue invoices promptly: Include due dates, payment terms, and methods.
  • Track unpaid invoices: Follow up on overdue payments.
  • Reconcile payments: Match bank deposits to invoices.

4. Reconcile Bank & Credit Card Statements

  • Monthly reconciliation: Compare bank statements to your books.
  • Flag discrepancies: Investigate missing transactions or errors.

5. Handle Payroll (If Applicable)

  • Payroll schedule: Stick to consistent pay periods.
  • Withhold taxes: Federal/state income tax, Social Security, Medicare.
  • File payroll reports: Form 941 (quarterly) and W-2s (annually).

6. Track Tax-Deductible Expenses

  • Common deductions:
  • Home office (if eligible)
  • Mileage/business travel
  • Marketing and professional development
  • Separate personal vs. business expenses.

7. Maintain Key Financial Records

  • Bank/credit card statements
  • Invoices and receipts
  • Tax returns and supporting documents
  • Loan agreements and contracts
  • Save records for 3–7 years

8. Prepare for Taxes

  • Quarterly estimated taxes: Due April, June, September, January (IRS Form 1040-ES).
  • Annual tax filings: Schedule C (sole props), Form 1120 (corporations), etc.
  • Send 1099s: To contractors paid $600+ (due January 31).

9. Backup & Security

  • Cloud storage: Backup digital records (e.g., Google Drive, Dropbox).
  • Physical copies: Store in a fireproof safe if needed.
  • Restrict access: Use passwords/encryption for sensitive data.

10. Monthly/Quarterly Reviews

  • Profit & Loss (P&L) statement: Track revenue vs. expenses.
  • Balance sheet: Review assets, liabilities, and equity.
  • Cash flow analysis: Ensure you have enough liquidity.

Bonus Tips

  • Automate: Use accounting software to auto-import transactions.
  • Hire help: A part-time bookkeeper or CPA for complex tasks.
  • Stay ahead: Schedule weekly 30-minute bookkeeping sessions to avoid backlog.
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