A monthly reconciliation (also known as account reconciliation) is the process of comparing your business’s internal financial records—such as your general ledger or bookkeeping software—with external statements like bank, credit card, or loan statements to ensure they match. In short, it’s a monthly routine that verifies whether every transaction has been accurately recorded, categorized, and accounted for.

Many small business owners believe bookkeeping is only necessary when tax season rolls around. They assume they can set aside receipts, invoices, and bank statements, then hand everything to their accountant or tax preparer once a year.

A document retention policy is an essential part of good recordkeeping and risk management for any small business. It helps ensure that your company maintains the right documents for the right amount of time—meeting legal requirements, protecting sensitive data, and avoiding clutter or costly mistakes. Without one, you risk noncompliance with tax laws, losing critical evidence in legal disputes, or wasting resources storing unnecessary records.

A chart of accounts is the organized list of all the categories your business uses to record financial transactions. Think of it as the backbone of your bookkeeping structure. Each account in the list represents a specific type of financial activity—like sales, rent, payroll, or utilities. Together, these accounts create the framework for your company’s financial statements.

A journal entry is the official way businesses record each financial transaction in their accounting system. Every time money moves in or out — whether you make a sale, pay a bill, or buy supplies — it gets logged through a journal entry.