Your books can be up to date and still be wrong. Here's what good bookkeeping actually looks like.
Your bookkeeper categorizes your transactions, reconciles your bank accounts, and sends you financial statements every month.
Sounds like everything is taken care of, right?
Well, not necessarily.
There's a big difference between having your transactions entered into QuickBooks and having financial statements you can actually trust.
In this episode of The Accounting Edit, we're breaking down what your bookkeeper should really be doing every month and why good bookkeeping involves so much more than simply keeping your accounts organized.
Think about it this way. You might have hundreds of transactions flowing through your business each month. Your accounting software automatically imports them, expenses get categorized, and everything appears to be running smoothly.
But what happens if a loan payment gets recorded entirely as an expense? Or a piece of equipment is incorrectly categorized? What if your balance sheet shows a negative liability that nobody has questioned?
Your books might look complete, but that doesn't necessarily mean they're accurate.
We talk about why monthly bank and credit card reconciliations are essential, how transactions should be reviewed for proper classification, and why your bookkeeper should be looking at the bigger financial picture rather than just individual transactions.
One of the most overlooked parts of bookkeeping is the balance sheet. While many business owners focus on their Profit and Loss statement, the balance sheet can reveal issues that aren't immediately obvious. From loans and credit cards to assets and liabilities, these balances need to make sense and accurately reflect what's happening in your business.
We also discuss the importance of reviewing financial trends. If an expense suddenly doubles, an account has an unusual balance, or profitability changes significantly, those movements deserve a closer look.
And here's something worth remembering: Accounting software doesn't replace professional judgment.
Automation can make bookkeeping faster, but it can't always determine whether a transaction makes sense, identify every error, or explain what your financial statements are telling you.
Ultimately, good bookkeeping isn't just about getting through a monthly checklist. It's about maintaining accurate financial records, catching issues early, and giving business owners reliable information they can use to make decisions.
If you're currently working with a bookkeeper, managing your own books, or considering outsourcing your accounting, this episode will help you understand what a proper monthly bookkeeping process should look like.
What we cover in this episode:
• Why monthly bookkeeping involves more than categorizing transactions
• The importance of reconciling bank and credit card accounts
• How to ensure transactions are recorded in the correct accounts
• Why your bookkeeper should review both the Profit and Loss statement and balance sheet
• Common errors involving assets, liabilities, and equity
• How reviewing financial trends can reveal potential problems
• Why unusual balances and discrepancies shouldn't be ignored
• The value of professional judgment beyond accounting automation
🎧 Listen to Episode 36: What Your Bookkeeper Should Actually Be Doing Every Month
Connect With Us
theaccountingedit.com
Aminder Mann, CPA
Website: sequoia-cpa.com
Instagram: @sequoiacpa
LinkedIn: Sequoia CPA
Leah McCool
Website: orca-accounting.com
Instagram: @orcaaccounting
LinkedIn: Leah McCool
Keywords: bookkeeping, financial statements, reconciliation, business finance, accounting, financial accuracy, bookkeeping responsibilities, financial review, small business accounting