Monthly bookkeeping · 3 minute read
The monthly close checklist for contractors
A real monthly close does four things: codes every transaction to the right category and job, reconciles every bank and card account to its statement, produces a P&L, balance sheet and job report, and ends with a short list of what needs your attention.
Categorizing transactions isn't closing the books
Plenty of contractors say their books are done because every transaction in the bank feed has a category.
That's step one of four. A month isn't closed until every account ties out to its statement and the reports have been reviewed. Here's the full checklist we run, which we call the Level Close.
Step 1: Gather and categorize
- Every bank and credit card transaction categorized
- Every supplier bill entered and coded to a job
- Receipts matched to their transactions
- Payroll recorded and split by job
- Sub payments coded to the sub and the job, with a W-9 on file
- Customer invoices and payments matched, including deposits and draws
The job coding is what makes job costing possible later. Skip it and the job reports are fiction.
Step 2: Reconcile every account to its statement
- Every checking and savings account
- Every credit card
- Every loan and line of credit
- Payroll liabilities and sales tax collected
Reconciling means the ending balance in QuickBooks matches the statement exactly. If it's off by $83, something is missing or duplicated, and it gets found now, while the month is still fresh.
Step 3: Produce the reports
- Profit and loss for the month and year to date
- Balance sheet
- Job profit report for jobs finished or in progress
- Who owes you (receivables) and who you owe (payables)
Reports are only useful if someone reads them. Ours come with a plain-English summary of what moved this month. Here's a sample of the monthly report.
Step 4: Review and build the action list
The close ends with a short list of what needs the owner's attention:
- Customers more than 30 days late
- Jobs running over their estimate
- Subs still missing a W-9
- Transactions that need an answer from you
Five items is a good month. Twenty means something upstream needs fixing.
The close takes the whole month, on a schedule
Our close runs in four weekly steps: gather and categorize in week one, reconcile in week two, report in week three and review in week four. You send receipts and answers by the 10th, and the routine handles the rest.
A closed month is what makes everything else on this site work: 1099s in January, a clean CPA handoff, and bids built on real numbers.
What to do next
Open QuickBooks and check the date of the last reconciliation on each account. If any are more than 60 days old, your books are behind. Here are the other signs to look for.
Want it done for you every month? Compare the three monthly plans, or see how onboarding works.