The owners who dread tax season are almost always the ones who skip the monthly routine. An hour of structured review each month prevents the multi-week cleanup that most filings require. This checklist works for any LLC, with extra items for S corporation owners.
Every month: the core routine
- 1Download or confirm statements for every bank, credit card, loan, and payment processor account.
- 2Review and categorize all transactions. Clear the uncategorized and Ask My Accountant balances to zero.
- 3Reconcile each account to its statement. See bank reconciliation problems if one will not balance.
- 4Check that deposits from card processors and platforms tie to gross sales, fees, and refunds.
- 5Review the accounts receivable and accounts payable aging reports. See accounts receivable services.
- 6Enter or approve vendor bills and schedule payments.
- 7Review the profit and loss against last month and the same month last year.
- 8Review the balance sheet for anything unexpected: negative balances, old items, odd equity entries.
- 9Save reports and documents, then lock the month.
Payroll items
- Confirm payroll runs matched the schedule and the payroll reports agree with the books.
- Check that payroll tax deposits were made on time under your deposit schedule. Monthly depositors generally deposit by the 15th of the following month, but confirm your schedule.
- Track the dates for quarterly Form 941 and annual Form 940 and W-2 filings.
- Make sure contractors have W-9s on file and payments are coded for year-end reporting.
- See small business payroll services.
Taxes collected and owed
- Sales tax: reconcile collected tax to the liability account and file returns on schedule. See sales tax filing services.
- Estimated taxes: confirm the next installment date and set aside the amount. See quarterly estimated taxes for LLC owners.
- Set aside money for income tax in a separate account. See how much to set aside for business taxes.
Extra items for S corporation owners
- 1Confirm you are being paid W-2 wages through payroll, at a level you can support. See S-corp reasonable salary.
- 2Record distributions as distributions, not as expenses or salary, and keep them proportionate to ownership.
- 3Track shareholder loans in a separate account with a record of balances.
- 4Keep a running log of distributions to help with year-end basis.
- 5Check that health insurance for more-than-2% shareholders is handled correctly.
Extra items for multi-member LLCs
- Record each member's contributions and distributions separately.
- Track guaranteed payments to members.
- Note any change in ownership percentages.
- See multi-member LLC tax filing.
Quarterly add-ons
- Review a year-to-date projection of profit and tax.
- Reconcile payroll filings for the quarter to the books.
- Review fixed asset purchases and categorize them as assets or expenses.
- Check state filings, annual reports, and license renewals.
Year-end add-ons
At year-end, add a full reconciliation of all accounts, an inventory count if you carry inventory, a review of receivables for write-offs, and a collection of tax documents. See how to prepare your books for a business tax accountant and small business year-end tax planning.
Make it a habit
- Pick a fixed date each month, such as the 10th, and block time for it.
- Use bank feeds, but review rather than approve in bulk.
- Keep business and personal spending separate.
- Hand it off to a bookkeeper if you cannot keep the schedule. See monthly bookkeeping cost.
Our bookkeeping service runs this routine for LLC and S corporation owners and delivers the reports. To discuss your bookkeeping needs, tell us your entity type, the number of accounts, and whether you have payroll.
