A monthly bookkeeping routine for small businesses

• Keep business money separate from personal money: a separate bank account is the single most useful habit.
• Ask for a bill or invoice for every purchase and issue one for every sale.
• Choose one place for records, whether software, a spreadsheet or a ledger, and use only that.

• Record the week’s sales, purchases, receipts and payments.
• Put each bill or voucher in a folder labelled by month.
• Note which customers have not yet paid and which suppliers you have not yet paid.

• Reconcile the bank statement with your books: every difference has a reason, and it is much easier to find it while the month is fresh.
• Check that every sale invoice and purchase bill of the month is recorded, and that the figures agree with your GST return if you are registered.
• Review overdue receivables and follow up.
• Record expenses that were paid in cash and keep the supporting bills.
• Back up the books, whichever system you use.

There is no single best package. Whatever you consider, check the following:

• It produces proper tax invoices and supports the GST reports you need.
• It reconciles with bank statements without retyping everything.
• It lets you give your accountant access, and control what they can change.
• Your data can be exported, so you are not locked in.
• It is backed up, and you know where your data is stored.
• Your team will actually use it: the best system is the one that is kept up to date.

GST returns, TDS statements and the income tax return are all produced from the same records. When the books are current, each filing is mostly a matter of checking figures; when they are not, each filing becomes a reconstruction. If your books are behind, the sooner you bring them up to date, the less each later step will cost in time and stress.

Ask an accountant if you are unsure which expenses to record where, if your books and your GST return do not agree, or if you are starting afresh after a period without records. A short review at the start usually saves much more time than it costs.

• Accounting and bookkeeping in Modasa
• GST compliance & returns in Modasa
• TDS, TCS & taxation support in Modasa

The rules, forms and due dates for this work are published by the authorities. Always check them for the current position:

• GST portal (gst.gov.in)(opens in a new tab)