A bookkeeping routine that takes 30 minutes a week

Most of the cleanup jobs we take on start the same way: the books were fine until a busy season, then three months of bank lines piled up uncategorized, then six. Catching up costs far more than keeping up.

Here is the routine we give clients who keep their own books in QuickBooks Online or Xero. Pick one day; Monday morning works for most.

Before you start: two setup rules

1. One business bank account and one business card. Nothing personal goes through them, and nothing for the business goes through your personal accounts. If something slips, record it as an owner contribution or a draw that week.
2. Connect the bank feeds. Both programs pull transactions in daily. Your weekly job is to review what they bring in.

The weekly 30 minutes

1. Categorize last week’s transactions (15 minutes)

Open the bank feed and match or categorize every line from the past week. Set rules for the ones that repeat, such as rent, the phone bill and software subscriptions, so next week has fewer lines to touch.

If you do not know where something goes, put it in an “Ask accountant” category with a note. One clear holding place beats a guess, and we clear it at the month end.

2. Attach receipts (5 minutes)

Photograph paper receipts with the app on your phone the day you get them. On Monday, check that the larger purchases have a receipt attached. For meals with a client, add a note: who, and what you discussed. The IRS accepts digital copies kept this way.

3. Chase what you are owed (5 minutes)

Look at unpaid invoices older than 30 days. Send one reminder from the program and call anyone past 60 days. Money owed to you is the easiest cash a small business has.

4. Look at the cash balance (5 minutes)

Note the balance, what bills are due in the next two weeks and when payroll runs. A five-line note in a spreadsheet is enough. You are looking for a squeeze before it arrives.

Once a month: one hour

• Reconcile every bank, card and loan account to the statement. The ending balance in the books should match the statement to the cent.
• Run a profit and loss for the month and the same month last year. Look for any line that moved by more than 20% and know why.
• Set aside tax. Move a set share of the month’s profit into a separate savings account for estimated taxes. For many sole proprietors, 25% to 30% of profit is a reasonable starting point; we set the figure for planning clients.
• File sales tax if you collect it. Illinois retailers file Form ST-1 monthly, quarterly or yearly, as the Department of Revenue assigns.

Signs it is time to hand it off

The routine stops working when the weekly half hour turns into three hours, when you have payroll and inventory to track as well, or when a lender asks for statements you cannot produce in a day. That is usually somewhere between 150 and 300 transactions a month.

When clients move to our monthly bookkeeping, the routine above is what we run for them, and the reports reach their inbox by the 15th.