How to Do Monthly Bookkeeping for Your Clients

Do you want to start your own bookkeeping business but are unsure how to do the monthly bookkeeping for smaller clients?  Bookkeeping for smaller clients is much simpler than for larger companies. 

These companies usually handle their own bill payments and deposits.  So all you have to do is post these transactions every month by tying them into the bank statement.  Depending on the size of the books, the total time you spend on smaller clients is usually under four hours.

Here’s the breakdown on how to do monthly bookkeeping for smaller clients:

1.      Sort out your client’s paperwork into the following piles:

                                                             i.      Bank statements & cancelled checks

                                                          ii.      Vendor invoices (accounts payable)

                                                        iii.      Debit and other small receipts

                                                        iv.      Payroll for employees

                                                           v.      Customer invoices / receipts (accounts receivable)

                                                        vi.      Credit card statements and receipts

                                                      vii.      Government remittances

1.      Start with vendor invoices and post these along with the accompanying cancelled check that was used to pay it.  Enter the actual check number in the accounting system along with the invoice number and amount.

2.      Post the debit receipts on purchases made through the company bank statement.  Any business receipts that were paid out of pocket by the owner are credited to the Owners / Shareholders account.

3.      Post any payroll checks that were paid to employees.  These are generally done manually (whether you provide deduction information or the client does these themselves).  Use any cancelled check numbers that you have.  I usually will post the full month of payroll even if I don’t have all the check numbers.  This is so I’ll have all the payroll entries in place to calculate the government payroll remittance.

4.      Post any customer invoices as a receivable as necessary.  Post any deposits for invoices that were paid by check.  You may have to setup a spreadsheet if you have a retail client in order to post daily cash deposits into various revenue accounts.  Alternatively, you could enter each daily cash deposit into the accounting program directly.  I find spreadsheets quicker and thus only have one entry to make for this in the accounting program.

5.      Finish the bank reconciliation.  If you have used the bank statement as your guide for posting, you should balance easily.  I find the bank reconciliation in my accounting software works very quickly and easily rather than a manual calculation.

6.      Post any credit card payments.  How you set this up will depend on whether the credit card is personal or business.  If it’s personal, run it through the Owner / Shareholder account.  If it’s all for business expenses, you can set it up as a Credit Card Payable.

7.      Do any government remittances as necessary.  Watch for deadline dates and make sure you get the information back to your client in time for payment.  I like to put a sticky note with the due date on any filled out remittances as a reminder for the client.

8.      Print off the financial statements, bank reconciliation and journal entries for your client’s binder (or files).  I usually print off two copies of the financials and give one to the client immediately while filing the other.

Those are the steps to do a small company’s monthly bookkeeping.  You’ll develop your own style and method but this is the basic outline for monthly bookkeeping.

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For more information on running a bookkeeping business,  check out Secrets to Starting & Running Your Own Bookkeeping Business.

Here's what one reader had to say:

Sylvia - I have been in the process of trying to start a Bookkeeping and Tax Service business for a couple of months now. I will be finished with my Bachelors in Accounting in February 2010 and will actually start my business the first of March. I am working full-time now, plus family responsibilities and school that it is hard for me to find the time to find clients. I then found your website, purchased the book and have been reading and following the steps in it. Your book was what I have been searching for, for a while now. It has the information I need and the steps required for me.

I really want to thank you for sharing this information. My situation at work has been going down hill for a while now and just because our state has been careless in its spending my salary will have been cut 4% in the last 3 months and I can't keep taking pay cuts for my governments mis-management of its money, I have a family to support and I want to be in control of my finances and I'm tired of others deciding for me what needs to happen.

Thank you again.

Kelly Muniz

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