A business with a handful of transactions has different bookkeeping needs from a company paying employees, collecting customer deposits and processing card sales every day. Both need reliable records. They may need different levels of ongoing accounting support.
The useful question is how often you need dependable numbers to make decisions. Before choosing monthly or quarterly support, separate three tasks: recording transactions, reconciling accounts and reviewing financial reports with your business accountant. A quarterly meeting does not mean the books should sit untouched for three months.
Start with the decisions you need to make
Think about what you need to know before the next quarter ends. Are you deciding whether to hire, increase prices, buy equipment or reduce spending? Do you need to understand which expenses have increased, whether customers are paying, or how much the business owes?
If you regularly make decisions that depend on recent numbers, a report that arrives several months later may have limited value. A quieter business may be comfortable with a less frequent formal review, provided transactions and supporting documents are still kept organized throughout the period.
Good records support both business decisions and tax preparation, as the IRS explains in its recordkeeping guidance. The service schedule should help you maintain those records and use them while the information is still useful.
When monthly bookkeeping is worth discussing
Monthly support may make sense when your business has several active accounts, regular payroll, frequent card settlements, outstanding customer invoices or supplier bills. These activities create balances that can become harder to investigate when questions are left unanswered for several months.
Ask what a monthly service actually includes. A useful discussion covers the accounts being reconciled, the records you provide, the reports you receive and how unresolved items are handled. A transaction feed importing every day does not, by itself, establish that the books have been reviewed or that a month is complete.
You can also ask when reports will be ready after the necessary records arrive. Avoid assuming that “monthly” promises a particular delivery date or unlimited advice. Those details belong in the agreed scope.
When a quarterly arrangement may fit
A lower-volume business with uncomplicated activity may want to discuss quarterly bookkeeping or quarterly review of books the owner maintains. These are different services. In one arrangement, the provider completes the agreed bookkeeping work; in another, the owner records transactions and the provider reviews defined areas.
Neither arrangement means receipts, invoices and explanations can wait until the quarter is over. The IRS recommends reconciling the business checking account each month in Publication 583. If your accountant’s involvement is quarterly, agree on who will maintain the records and handle the monthly reconciliations between reviews.
For example, an owner who keeps a small set of accounts current may need periodic help reviewing classifications and reports. An owner who cannot keep up with recording and reconciling transactions may need more hands-on monthly support, even if the business is small.
Less frequent bookkeeping also does not change payroll, sales-tax or other filing deadlines. Those responsibilities need their own schedule. Our guide to keeping bookkeeping, payroll, sales tax and tax returns connected explains why the work should be coordinated.
Separate catch-up work from the ongoing schedule
If the books are behind, choosing a future monthly plan does not automatically resolve the older periods. First identify the last reconciled date, missing statements, unresolved balances and any periods already used for tax filings.
Discuss the catch-up work separately, including how the ending balances will become the starting point for ongoing bookkeeping. This helps prevent a new reporting routine from carrying old mistakes forward. It also makes the proposed fee easier to understand: initial cleanup and recurring work may involve different amounts of effort.
Compare scope before comparing prices
Two proposals described as “monthly bookkeeping” can cover very different work. Compare the number of accounts, transaction volume, treatment of customer invoices and supplier bills, reports, owner responsibilities and included discussion time. Confirm whether payroll support, sales-tax filings and tax returns are separate services.
Also ask how a growing business changes the arrangement. Adding an account, employee or sales channel may justify a revised scope. A clearly explained change is easier to evaluate than discovering later that important work was never included.
Review the schedule as your business changes
There is no need to select a plan for a business you might become years from now. Choose a schedule that addresses today’s workload and information needs, then revisit it when the business changes. Seasonal activity may also require more attention during certain periods.
Go Tax Dude provides small business accounting and bookkeeping in Port Washington and remotely. Services can be selected individually or coordinated around your business, including bookkeeping, payroll support, sales-tax filings and business tax preparation.
Talk with us about a bookkeeping schedule that fits your business.