The Monthly Financial Routine That Keeps You Out of Trouble

Here is the routine. It takes about an hour, and it replaces most of what people pay to fix later.

Week 1, after the month closes

Reconcile every bank account. Every one, including the card and the account nobody uses. This is the foundation. Nothing else in the routine is reliable without it.

Check nothing is unposted. Transactions sitting in a holding account are not posted, they are parked.

Week 2

Look at your receivables ageing. Not the total. The list.

Anything over 60 days gets a decision. Chase it, agree a plan, or accept it will not be collected. The decision matters more than the outcome, because a receivable nobody has decided about sits there for three years.

Look at your payables. Know what is due before it is overdue, especially anything to an authority.

Week 3

Reconcile your headcount to your payroll run. Actual staff list against people paid. This takes five minutes and it is one of the most valuable controls a small business has.

Review payments over your threshold. Not to approve them again. To ask what each one bought. Subscriptions nobody cancelled and rates agreed years ago surface here.

Week 4

Read the profit and loss against last month. Look for what moved and ask why. You are not doing variance analysis. You are noticing surprises while they are small.

Update the 13-week cash forecast. Replace the week that happened, add a new week 13.

Quarterly, on top

Reconcile your VAT return to the ledger before you file it, not after.

Count petty cash unannounced, using someone other than the custodian.

Review your fixed asset register against what actually exists.

Annually, and early

Set your cut-off rule before the year ends.
Review receivables and write off what will not be collected.
Document related party arrangements in writing.
Decide the Small Business Relief question with your revenue figure in front of you, not after the year has closed.

The three habits underneath all of it

Attach documents as you post. Not at year end. The invoice goes on the transaction the day it is entered.

Keep owner money separate from company money. If that is impossible, post it properly as it happens rather than reconstructing it later.

Decide during the year, not after. Every accounting decision made after you can see the result is a worse decision, and looks worse to anyone reviewing it.

What this buys you

A cheaper audit, because audit fees track mess more than size.

A Corporate Tax computation resting on supported numbers, since the computation starts from your accounting income.

Management accounts you can actually use, because they are current.

And no year end scramble, which is the one benefit owners notice immediately.

What to do if you are already behind

Do not try to fix everything.

Reconcile the banks first, from the oldest unreconciled month forward. Everything else depends on it and nothing else is worth doing until it is done.

Then start the routine from this month, and catch up the history in parallel.

Where we fit

We run this monthly for clients as part of bookkeeping. If you would rather do it yourself, the routine above is the whole method.