Many small companies treat bookkeeping as a yearly event. Receipts sit in a drawer, invoices in an inbox, and in the weeks before the deadline somebody tries to remember what a payment in March was for. The accountant then spends paid time chasing documents, and the owner learns about problems far too late to fix them. A monthly routine takes about an hour and removes most of this.
Why monthly beats yearly
Small questions are easy to answer in the same month. "What was this card payment?" takes a minute while the purchase is fresh and an afternoon twelve months later. A monthly rhythm also shows you how the business is doing while there is still time to act: unpaid customer invoices, costs growing faster than sales, or a VAT bill you did not plan for.
This article is about the monthly handover. The yearly step is covered in preparing documents for the accountant at year-end. If the monthly routine works, the year-end list is mostly a matter of confirming what the accountant already has.
Agree the rhythm with the accountant first
Before you change anything, ask the accountant three questions:
- Which format do they prefer: a shared folder, their own software, or email attachments?
- By which day of the month do they need documents to include them in that month's work?
- How quickly do they reply to questions, and by what channel?
Write the answers on one page. A typical result is: documents by the 5th, summary back by the 12th, questions answered within three working days. The exact days matter less than having them written down.
What to send each month
Keep the checklist short enough to fit on one screen:
- Sales invoices issued in the month, including credit notes.
- Purchase invoices and receipts for costs paid by the company, including those paid by staff and claimed back. A simple routine for these is described in employee expenses and receipts.
- Bank and card statements for every account, even if the accountant has a bank feed.
- Payroll reports, if you run payroll yourself.
- Anything unusual: a new loan, a large purchase, a refund, a new contract with a client abroad.
- Open questions from the previous month, each with your answer.
If a document is missing, send the rest anyway and mark the gap. A complete list with one known hole is better than waiting for a perfect package.
Name two people, not one
Two roles keep the routine alive, and in a small company they can be two different people or, at minimum, two separate steps:
- The sender collects the documents and sends them by the agreed day. Put it in their calendar as a recurring task.
- The checker reads the accountant's monthly summary and asks about anything that looks wrong: a cost that is far above normal, a customer who has not paid, a category that seems odd.
The sender should not be the only reader of the result. The point of the second pair of eyes is that mistakes in categories or missing invoices show up while they are small.
A one-hour monthly checklist
On the agreed day, the sender can work through this order:
- Export the sales invoices for the month from your invoicing tool.
- Gather purchase invoices and receipts into one folder named by month.
- Download bank and card statements.
- Compare the bank statements against the invoices: every payment should have a document, or a note saying why not.
- Send the folder with a short email listing what is included and what is missing.
- Note the date sent and the date the summary is expected back.
Step 4 is the one people skip, and it is the one that saves the accountant the most time.
What the checker looks for
When the summary arrives, spend fifteen minutes on four things:
- Does the total of sales match what you think you invoiced?
- Are there costs you do not recognise?
- Which customer invoices are overdue, and who is chasing them?
- Is there any tax payment coming up, and is there enough cash for it?
Reply to the accountant with answers, or with "all fine", so they know the month is closed. An unanswered summary leaves the accountant guessing whether you read it.
Keep the records
Companies have to keep accounting records for a set period, and the rules differ by situation. GOV.UK explains what records a limited company must keep and, if you are VAT-registered, the VAT record-keeping rules. Store documents in a place where a colleague can find them if the usual person is away, and do not rely on one personal mailbox. Copies of bank statements and invoices should be readable, named by month and not edited after they are sent.
When something goes wrong
If a month is missed, do not wait for the next one. Send both months together with a note on why the first was late, and ask the accountant whether the delay changes any deadline. If the accountant stops replying within the agreed time, raise it once in writing, and if it repeats, treat it as a reason to review the arrangement rather than to wait.
What to do this week
- Ask your accountant the three questions above and write down the answers.
- Pick the sender and the checker, and add a recurring reminder for the sender.
- Create the monthly folder structure and copy the checklist into a short email template.
- Send the first package for the last full month, even if it is incomplete.
- After the second month, review: what was missing, what took too long and what can be dropped.
Sources
- GOV.UK, Running a limited company: company records: which records a company must keep and for how long.
- GOV.UK, VAT record keeping: what VAT-registered businesses must keep and how.
- GOV.UK, Running a limited company: overview of an owner's accounting and filing duties.