A Must-Do Checklist for Year-Round Bookkeeping Compliance 

Maintaining compliance is a must-do as a growing business, but it’s not always prioritized as it should be. As you scale, financial management becomes more complex, so you’ll want to be proactive to ensure you aren’t just ticking boxes. Instead, you want to ensure your business remains financially healthy and ready to seize opportunities and hit the next growth milestones. 

Keep reading to discover the must-do checklist for year-round bookkeeping compliance and actionable steps you can take monthly, quarterly, and yearly to optimize your financial management practices and keep your business on track. 

Monthly Tasks to Lay the Foundation

You should view monthly bookkeeping tasks as regular health check-ins for your business. Ignoring these tasks is akin to ignoring an odd noise in your car, which might eventually become a massive problem if left untreated. 

Every month, you’ll want to scrutinize your income statements, balance sheets, cash flow statements, and gain insights into the health of your organization. 

Every month, you’ll want to: 

1. Reconcile bank and credit card statements
2. Review financial statements
3. Maintain accurate records

This isn’t always as simple as it looks, especially as your company scales. Financial processes become more complex, and sometimes, it’s unclear how to categorize and record different items, what type of organizational structure is best for taxes, and how to optimize your business operations. 

But these monthly tasks are your first line of defense against errors and fraud and the best way to ensure you have accurate information on which to base decisions for the future of your business. 

Let’s break down each of these monthly tasks into actionable steps. 

Reconcile Bank and Credit Card Statements

Every month, take the time to reconcile your bank and credit card statements to ensure all transactions are recorded accurately and to catch any discrepancies early. By doing so, you can maintain the integrity of your financial records and ensure that your cash flow statements reflect reality. 

Action Steps: 

• Gather all of your bank and credit card statements for the month. 
• Compare each transaction with your internal records. 
• Investigate and resolve any discrepancies immediately. 

Review Financial Statements

Monthly reviews of your income statement, balance sheet, and cash flow statements provide a snapshot of your business’s financial health. You’ll be able to spot trends, identify potential problems, and make adjustments quickly. 

Action Steps: 

• Schedule monthly review meetings. 
• Analyze key metrics like revenue, expenses, and net profit. 
• Discuss findings with your financial team and course-correct as needed. 

Maintain Accurate Records

Accurate record-keeping involves meticulously documenting every financial transaction to help make data-driven decisions for the business, support your initiatives, and prepare for tax season and any potential audits. 

Action Steps: 

• Implement a digital filing system, ideally an automated one, for easy access and organization. 
• Develop a work culture of detailed record-keeping. 
• Regularly audit records for accuracy and completeness. 

Quarterly Tasks to Determine How You’re Doing

Some tasks are better left on the monthly task list because waiting until your quarterly review to diagnose a problem could be too late. These quarterly tasks help steer your business in the right direction. You’ll be able to manage cash flow more effectively, make adjustments, and ensure your company remains financially sound and compliant. 

Every quarter, you’ll want to: 

1. Review and adjust budgets based on performance, business goals, and market conditions. 
2. Look at KPIs to determine if you’re on track with business objectives. 
3. Estimate and pay quarterly taxes as necessary to avoid penalties. 

Depending on what kind of business you have, you might do inventory audits, or if you’re a SaaS company, you might want to conduct a customer churn analysis to help identify patterns and find ways to improve customer retention. 

To make these quarterly tasks easier, set a recurring review schedule that everyone who needs to know will know about and block off time for. Involve your financial team, use automation tools to streamline whatever you can, and hire a fractional CFO to help make this process even more fruitful. 

Now, let’s look at each task you should do during quarterly reviews. 

Review and Adjust Budgets

Quarterly budget reviews allow you to compare your financial performance against your projections. You’ll be able to understand where you’re on track and where you might need to make adjustments. Budgeting isn’t a one-and-done kind of task. It’s an iterative process that evolves as your business does. 

Action Steps: 

• Analyze budget variances and dig into discrepancies. 
• Adjust budget allocations based on performance and priorities. 
• Communicate changes to the right people. 

Track and Adjust KPIs

You want to regularly review key performance indicators because they provide valuable insights into your company’s performance. You’ll easily be able to identify your strengths, weaknesses, and opportunities for growth. KPIs ensure you’re aligned with strategic business goals. 

Action Steps: 

• You should already have identified the most critical KPIs for your business, so at your quarterly review, you’ll want to collect accurate data to analyze trends and establish benchmarks to measure for the next quarter and year. 
• Develop strategies to improve underperforming areas and double down on what’s working. 
• Share these insights and action plans with the team to ensure everyone is aligned and working towards the same goals. 

Estimate and Pay Taxes

You can avoid penalties and ensure compliance with tax regulations by making quarterly tax payments. It’s a proactive approach to managing your cash flow better. A strategic financial partner like a fractional CFO can help reduce tax liability while ensuring compliance. 

Action Steps: 

• Calculate estimated taxes based on your current financial data. This is why accurate reporting is critical. 
• Set aside funds for those tax payments. 
• Submit payments to the IRS and any relevant entities on time to avoid late fees and penalties. 

Annual Tasks: A Year in Review and Looking Ahead

It’s time to tie up loose ends and set the stage for the following year. Future planning and forecasting for the next year typically land around the end of the fiscal year, usually in the third or fourth quarter. You want time to gather and analyze this year’s data, assess market conditions, and align your goals and projections for the upcoming year. 

Some annual bookkeeping tasks you’ll want to prioritize are: 

• Preparing financial statements. 
• Conducting a year-end review. 
• Organizing tax documents. 

You can avoid last-minute scrambling by staying on top of your monthly and quarterly bookkeeping checklists throughout the year and keeping accurate and easily accessible data to help drive future decisions and goals. 

Let’s look at each of the annual accounting tasks in greater detail. 

Prepare Financial Statements

It’s the end of the fiscal year, so you want to compile reviewed financial statements to provide valuable insights into your business’s overall performance. 

Action Steps: 

• Gather all financial data and documentation. If done right, this will all be automated, digitally organized, and easy to access, and it will be precisely what you need when you need it. 
• Work with your accountant or fractional CFO to ensure compliance and accuracy. 
• Review statements to glean insights into your financial health and profitability. 

Conduct a Year-End Review

This is an opportunity to reflect on the past year and plan for the future. You can bring the whole team into this conversation to celebrate your wins, set goals for the next year, and level-set everything that’s happened up to this point. 

During a year-end review, you should compare actual results against budgets and forecasts to identify areas of improvement and set new goals for the following year. 

Action Steps: 

• Analyze performance and key metrics. 
• Identify successes and areas for growth. 
• Develop a strategic plan for the coming year. 

Organize Tax Documents

If you’ve hired a fractional CFO, this will all be handled for you. Tax season can be stressful, but preparation makes everything a more pleasant experience. Organize all necessary documents to ensure everything is accurate for tax filings.

Action Steps: 

• Collect all relevant tax documents and records. 
• Verify the accuracy of contractor information and forms, as needed. 
• Work with your bookkeeping and tax professional to prepare and file taxes. 

Year-Round Bookkeeping Checklist for Compliance

A year-round bookkeeping checklist can help keep your business on track no matter the season. As your organization becomes more complex, you might want to consider hiring a fractional CFO with bookkeeping experience to help manage the financials. 

A fractional CFO will keep you ahead of the curve on tax regulations, maximizing your benefits and minimizing liabilities, all while staying compliant. 

This comprehensive checklist includes monthly, quarterly, and annual bookkeeping tasks to keep your business in tip-top shape. You’ll also want to implement ongoing bookkeeping tasks that include: 

1. Leveraging Cloud-based accounting software to automate the bookkeeping process. This improves accuracy and provides real-time financial insights for faster decision-making. 
2. Staying informed on tax laws, which are constantly evolving. Your fractional CFO can do this for you, so you don’t have to worry about missing out on anything important that could impact the future of your business. 
3. Scheduling regular check-ins with your financial management partner. This gives you frequent opportunities to catch minor issues before they become big problems and to analyze financial insights that could lead to better performance. 

Effective bookkeeping isn’t just about compliance. It’s about empowering your business to thrive in a competitive marketplace. Take these steps seriously, and you’ll build a strong foundation for a financially healthy company and long-term success. 

‍