Running a business is demanding. When bookkeeping is handled reactively instead of routinely, it quickly becomes stressful, time consuming, and error prone. Setting up a simple monthly financial routine helps keep your books accurate, your cash flow predictable, and your tax filing smooth.

This guide outlines a practical monthly bookkeeping routine that saves time and prevents problems before they start.

Why monthly routines matter

Many business owners wait until tax season to review their finances. By then, issues are harder to fix and take far more time.

A monthly routine helps you:

• Catch errors early before they compound

• Stay prepared for HST and income tax filings

• Understand cash flow trends while there is still time to adjust

• Reduce year end workload and accounting costs

Consistency is far more important than complexity.

Step 1. Reconcile all bank and credit card accounts

At least once per month, every business bank account and credit card should be reconciled.

This means:

• Matching transactions in your bookkeeping software to bank statements

• Ensuring deposits, payments, and transfers are recorded correctly

• Identifying missing, duplicated, or miscategorized transactions

Reconciliation ensures your financial reports are accurate. Without it, numbers on your profit and loss statement cannot be trusted.

Step 2. Review and categorize transactions properly

Auto categorization saves time but should never be fully trusted.

Each month, review:

• Expense categories for accuracy

• Personal expenses that may have been accidentally included

• Meals, vehicle, and home office expenses that require proper tracking

Correct categorization improves reporting and ensures deductions are defensible if reviewed.

Step 3. Track and review HST

If your business is registered for HST, monthly tracking is essential.

You should:

• Confirm HST collected on sales is recorded correctly

• Verify HST paid on expenses is captured for input tax credits

• Set aside funds for upcoming remittances

Monthly HST tracking avoids surprises and cash flow stress when filing deadlines arrive.

Step 4. Review your profit and loss statement

Your profit and loss statement tells you whether your business is actually making money.

Each month, take a few minutes to review:

• Revenue trends

• Major expense changes

• Net profit compared to previous months

You do not need to analyze every line item. The goal is awareness, not perfection.

Step 5. Check accounts receivable and payable

Unpaid invoices and overdue bills directly impact cash flow.

Monthly review should include:

• Outstanding customer invoices that need follow up

• Bills due in the next 30 days

• Subscription or recurring expenses that may no longer be needed

This step alone can significantly improve cash flow without increasing sales.

Step 6. Store receipts and documents properly

Receipts should be stored digitally and attached to transactions where possible.

A simple system includes:

• Monthly folders by year

• Clear naming conventions

• Digital copies stored securely

This makes audits, reviews, and year end filings much easier.

Step 7. Schedule a recurring bookkeeping check in

The biggest reason routines fail is forgetting to do them.

Schedule a recurring monthly check in with:

• Your bookkeeping software

• Your accountant or bookkeeper

• Yourself if you manage books internally

Treat this time as a non negotiable part of running your business.

How professional bookkeeping saves even more time

Many business owners attempt to manage bookkeeping alone, then realize the time cost outweighs the savings.

Professional monthly bookkeeping provides:

• Consistent reconciliations

• Clean, reliable financial reports

• Ongoing HST tracking

• Fewer errors and less stress at tax time

It also frees you to focus on running and growing your business.