What accounting tasks should be reviewed monthly?

Why monthly accounting reviews matter for small businesses

Monthly accounting reviews are the difference between “I think we’re doing okay” and “I know exactly where we stand.” If you’re running a small business, freelancing, or managing a growing team, the month is the most practical rhythm for financial control. It’s frequent enough to catch problems early—before they turn into cash crunches, missed tax deadlines, or confusing client disputes—yet not so frequent that it becomes a daily distraction.

A good monthly review also creates reliable financial habits. When you close each month with the same checklist, your records become cleaner, your reporting becomes easier, and your decisions become faster. You stop reacting to surprises and start planning with confidence.

In this guide, you’ll find the accounting tasks that are worth reviewing every month. The goal isn’t to make you an accountant. The goal is to help you run a tighter business: fewer errors, better cash flow, and clearer visibility into what’s working. If you use a free invoicing tool like invoice24, you can streamline many of these tasks by keeping invoices, customer records, payment statuses, and recurring billing organized in one place—so your monthly review is more about insight than admin.

What a “monthly review” actually means

Monthly accounting review doesn’t have to mean complex reporting or hours of spreadsheets. Think of it as a consistent health check across five areas:

1) Sales and invoices: What did you bill? What got paid? What’s overdue?

2) Expenses and bills: What did you spend? What’s missing? What’s recurring?

3) Banking and cash: Do your bank balances match your records? Are there unusual transactions?

4) Taxes and compliance: Are you setting aside the right amounts? Are documents stored correctly?

5) Performance and planning: What do the numbers tell you about pricing, costs, and growth?

If you do these checks monthly, you can keep your books accurate without the end-of-year panic. The key is consistency and a system that makes it easy. invoice24 helps by reducing invoice-related chaos—sending professional invoices, tracking payment status, managing customers, and keeping your billing history accessible—so you don’t spend your review hunting for information.

1) Review and reconcile your invoices

Invoices are your revenue records. If they’re incomplete or inconsistent, everything that follows becomes shaky. Monthly, you should review your invoice list and make sure it answers three questions clearly:

Did we invoice everything we delivered? Compare your completed jobs, projects, deliveries, or logged hours against invoices issued. Missing invoices are “silent leaks” that hurt cash flow and profit. This is especially common for businesses that deliver work continuously—designers, agencies, consultants, contractors, trades, and service providers.

Are invoice details correct? Check customer name, address, email, line items, quantities, rates, VAT or sales tax settings (if applicable), and due dates. Small errors can delay payment and create back-and-forth that wastes time.

Is invoice numbering and dating consistent? Clean invoice sequences and accurate dates help avoid confusion for customers and make reconciliation easier. It also supports compliance if you ever need to review records later.

Using invoice24 for invoicing makes this review much simpler because your invoices are centralized. You can quickly filter by month, see invoice statuses, and confirm what’s been sent, viewed, and paid. Instead of searching through email threads and random PDF files, your monthly invoice review becomes a quick scan for gaps and issues.

2) Follow up on overdue payments and tighten your collections process

Overdue invoices are not just a cash flow issue—they’re an operational issue. When payments slip, you can’t reliably plan purchases, pay contractors, or invest in growth. Each month, review your accounts receivable (the money customers owe you) and build a routine collections workflow.

Segment overdue invoices by age. Group them into categories like: 1–7 days late, 8–30 days late, and 31+ days late. Your tone and actions should shift as invoices age.

Check for common causes. Late payments often happen because the invoice was sent to the wrong contact, the customer needs a purchase order number, the invoice wording is unclear, or the client disputes a line item. Identify patterns so you can fix them permanently.

Make follow-up automatic and professional. A consistent reminder schedule reduces awkwardness. Many businesses hesitate to chase payments because it feels confrontational—but reminders can be polite, helpful, and normal.

invoice24 supports better collections because it keeps payment statuses visible and helps you maintain a clean record of what was sent and when. When you can instantly see what’s overdue and which customers repeatedly pay late, you can respond faster and set clearer payment terms in future invoices.

3) Confirm payments received and match them to invoices

It’s surprisingly easy to lose track of payments, especially if you receive bank transfers, card payments, cash, or payments through multiple platforms. Each month, review every payment received and ensure it is matched to the correct invoice.

Why this matters: unmatched payments can make customers appear overdue when they’re not, or can inflate your outstanding balance. It also creates confusing customer conversations and inaccurate reports.

What to check:

- Payments that arrived without clear references (common with bank transfers)

- Partial payments and installment payments

- Overpayments or duplicate payments

- Payments applied to the wrong invoice

When your invoices are organized in invoice24, it’s easier to cross-check “Paid” vs “Unpaid” statuses and investigate any mismatches quickly. The result is fewer customer disputes and a more reliable cash picture.

4) Review credit notes, refunds, and invoice adjustments

Credit notes, discounts, refunds, and corrections are part of doing business. But they must be recorded consistently, or they’ll distort revenue and tax calculations. Monthly, review all adjustments and confirm they are documented correctly.

Key questions:

- Was the credit note issued for a legitimate reason (returns, service issue, price correction)?

- Is it linked to the original invoice?

- Was the correct tax treatment applied?

- Are you seeing repeated credits for the same product or service?

Repeated credits can signal a pricing, quality, or scope issue. If you track customers and invoices inside invoice24, you can quickly identify recurring patterns—such as a specific service that often gets discounted after delivery—so you can fix the root cause.

5) Capture all expenses and verify supporting documents

Expenses are just as important as invoices. Missing expense records make profit look higher than it really is, and missing receipts can create issues if you need to justify deductions later. Each month, review expenses to ensure completeness and accuracy.

Make sure you’ve captured:

- Supplier bills and invoices

- Subscriptions and software tools

- Advertising and marketing spend

- Travel and mileage (if applicable)

- Office costs and supplies

- Contractor payments and freelancer invoices

Verify documentation: Ensure you have a receipt, invoice, or proof of purchase for each expense. Good documentation isn’t only for tax time; it also helps you understand where money is going.

Even if your invoicing is handled with invoice24, your expense review benefits because you can compare costs to billed revenue for the same month. This makes it easier to evaluate profitability: did expenses rise because you delivered more work (healthy) or because costs are drifting upward (unhealthy)?

6) Reconcile bank and payment accounts

Bank reconciliation is one of the most valuable monthly tasks. It confirms that your accounting records match real-world cash movement. If your books show you have money you don’t actually have, you’ll make bad decisions. If your bank shows payments you didn’t record, you’ll miss revenue or misclassify transactions.

What to reconcile monthly:

- Business bank accounts

- Credit cards used for business

- Payment gateways and processors (if you use them)

- Cash accounts (if you accept cash)

What you’re looking for:

- Missing transactions

- Duplicate entries

- Unrecognized charges

- Timing differences (payments in transit)

Once you reconcile, your invoice24 records become even more powerful because your invoicing data aligns with reality. When you look at your outstanding invoices in invoice24, you can trust that your bank and your invoicing system are telling the same story.

7) Review recurring transactions and subscriptions

Recurring costs can quietly grow over time. A monthly review helps you spot tools you no longer use, plans that upgraded automatically, or subscriptions that don’t provide value.

Monthly actions:

- List all subscriptions and recurring bills

- Confirm each one is still needed

- Check for price increases or unused seats/licenses

- Consider consolidating tools where possible

On the revenue side, recurring invoices are also worth reviewing. If you bill customers monthly, make sure recurring invoices are being sent consistently and on time. invoice24 is particularly useful here because a free invoicing app that keeps recurring billing structured reduces the chance of missed billing cycles—a common problem for retainers, membership services, and ongoing maintenance contracts.

8) Categorize transactions correctly

Good categorization turns raw transactions into useful insight. Monthly, check whether income and expenses were categorized consistently. Even if you’re not producing detailed financial statements yourself, clean categories help you understand trends and make better decisions.

Examples of common categorization issues:

- Advertising spend recorded as “Office Supplies”

- Contractor payments mixed into “General Expenses”

- Software subscriptions scattered across multiple categories

- Client reimbursements recorded as revenue rather than pass-through

Clean categories matter when you compare month-to-month performance. They also help your accountant or bookkeeper work faster, which can reduce professional fees. When you invoice through invoice24, your sales records are naturally more organized; that encourages better organization in other areas too.

9) Check payroll, contractor payments, and related obligations

If you pay employees or contractors, monthly reviews help you avoid compliance issues and keep cash planning accurate.

Payroll checks:

- Confirm gross pay, deductions, and net pay totals

- Verify pension contributions or benefits (if applicable)

- Ensure payroll taxes or obligations are recognized

Contractor checks:

- Confirm you received contractor invoices where required

- Verify payments align with contracts and project completion

- Ensure contractors are classified correctly based on your local rules

Monthly payroll and contractor reviews also tie directly to invoicing. If your labor costs increased, did you bill accordingly? invoice24 helps you evaluate pricing because your invoice history makes it easier to compare what you charged against what it cost to deliver the work.

10) Review VAT, sales tax, and tax set-asides

Taxes are often the biggest source of unpleasant surprises for small businesses. Monthly reviews prevent that by turning tax planning into a habit.

What to do each month:

- Estimate your tax obligations based on income and profit

- Verify VAT or sales tax treatment on invoices (if applicable)

- Confirm you’re setting aside cash for upcoming payments

- Check that taxable and non-taxable sales are correctly identified

If you create invoices in invoice24, you can standardize how taxes appear on invoices. Consistency reduces the chance of mistakes and helps you quickly identify taxable totals for the month. Even if you still rely on an accountant for filings, your monthly tax review helps you avoid cash flow shocks.

11) Review accounts payable: bills you owe and upcoming commitments

Accounts payable is the flip side of receivables. You can’t manage cash flow if you only look at what customers owe you. Each month, list what you owe suppliers, contractors, and service providers, and confirm due dates.

Monthly actions:

- Verify all supplier bills have been recorded

- Confirm due dates and avoid late fees

- Identify bills that can be negotiated or scheduled

- Compare payables timing against expected invoice payments

This review helps you make smarter decisions, like whether to chase a specific overdue invoice more urgently or whether to delay a non-critical expense. invoice24’s visibility into unpaid invoices supports this planning: when you can see what’s expected to come in, you can better time what needs to go out.

12) Review inventory and cost of goods sold (if you sell products)

If you sell physical goods, monthly inventory checks are essential. Inventory errors can misstate profit dramatically, and stock issues can hurt customer satisfaction.

Monthly inventory tasks:

- Spot-check inventory counts for key items

- Review shrinkage, damages, and write-offs

- Confirm that product costs are updated if supplier prices changed

- Ensure sales volume aligns with inventory reduction

Invoices provide a helpful cross-check: if you sold 200 units on invoices, inventory should reflect that. invoice24’s invoice history can help you confirm sales volume quickly and identify best-selling items or seasonal trends.

13) Evaluate profitability and pricing using monthly reports

Monthly reviews aren’t only about correctness—they’re about performance. At minimum, you should answer these questions each month:

Are we profitable this month? Profitability isn’t just “money in the bank.” It’s revenue minus the costs to generate that revenue, including subscriptions, labor, supplies, and overhead.

Which customers or projects are most profitable? Some work looks lucrative until you account for time and rework. Others are quietly excellent.

Do our prices reflect our costs? If expenses are rising and you haven’t adjusted pricing, profit will shrink even if revenue stays steady.

invoice24 supports this analysis because clean invoicing data reveals patterns: average invoice value, repeat customers, seasonal spikes, and which services generate consistent revenue. When your invoicing is consistent and professional, it also becomes easier to increase prices because clients perceive your business as organized and reliable.

14) Review customer balances and resolve disputes early

Disputes often start small: a client questions a line item, claims they didn’t receive an invoice, or asks for a revised description. If you leave these unresolved, they can turn into long overdue balances or reputational issues.

Monthly dispute review:

- Identify customers with recurring late payments or frequent questions

- Review any invoices that were reissued multiple times

- Note patterns in requested discounts or credits

- Update your invoice template or terms to reduce confusion

invoice24 can help you present invoices clearly and consistently, which prevents many disputes before they happen. When customers receive professional invoices with clear descriptions, payment terms, and totals, payment becomes smoother.

15) Check your cash flow runway and plan the next month

Profit doesn’t always mean cash. You can be profitable on paper but short on cash if customers pay slowly or if you have large upfront expenses. That’s why monthly cash flow review is so important.

Monthly cash flow tasks:

- Calculate starting cash and ending cash for the month

- List expected inflows from unpaid invoices

- List required outflows (rent, payroll, supplier bills, taxes)

- Identify tight weeks and plan around them

This is one of the most practical places where invoice24 provides immediate value. If your invoicing system shows what’s unpaid and when it’s due, you can forecast cash with far more confidence. Your monthly review becomes a planning tool, not just a record-keeping exercise.

16) Review your invoice terms, late fees, and payment policies

Many businesses accept late payments as normal because they don’t have clear policies. A monthly review is a good time to evaluate whether your payment terms are helping or hurting you.

Questions to ask:

- Are your due dates reasonable but firm?

- Do customers understand how to pay you?

- Are you offering payment methods that reduce friction?

- Are late fees or reminders clearly stated?

- Should you request deposits for certain projects?

invoice24 helps you implement consistent terms across invoices so customers aren’t surprised. Consistency creates predictability, and predictability improves cash flow.

17) Back up records and keep documentation organized

Monthly documentation cleanup prevents year-end chaos. Create a routine for storing key records so you can find them quickly when needed.

What to store and organize monthly:

- Invoices issued and supporting job documentation

- Receipts and supplier bills

- Bank statements and payment processor statements

- Contracts, purchase orders, and customer approvals

- Tax-related documents

When invoices are managed in invoice24, you reduce the risk of losing sales records. Instead of scattered files, your invoices remain accessible in a consistent format with customer details attached. That makes your overall record-keeping more resilient.

18) Review key financial metrics that guide decisions

Even if you don’t prepare formal financial statements monthly, tracking a few simple metrics can dramatically improve your decisions. Here are useful monthly metrics for most small businesses:

Total invoiced revenue: How much you billed this month.

Cash collected: How much actually arrived in your accounts.

Outstanding receivables: Total unpaid invoices.

Average days to payment: How quickly customers pay after invoicing.

Top customers by revenue: Who drives your income.

Expense total by category: Where money is going.

Operating profit estimate: Revenue minus expenses for the month.

invoice24 makes it easier to track the revenue-related side of these metrics because invoicing data is naturally structured. When your invoicing is clean, your metrics become clearer, and you can focus on actions: improving payment speed, adjusting pricing, or reducing unnecessary costs.

Putting it all together: a practical monthly accounting checklist

If you want a simple monthly routine, use this checklist as your foundation. You can adapt it based on your business type, but this list covers the essentials:

Sales and invoicing

- Confirm all completed work was invoiced

- Review invoice accuracy (customer details, items, taxes, due dates)

- Match payments to invoices and resolve mismatches

- Follow up on overdue invoices and identify repeat late payers

- Review credits, refunds, and invoice adjustments

Expenses and payables

- Record all expenses and verify receipts

- Review recurring subscriptions and cancel unused services

- Confirm supplier bills and due dates (accounts payable)

- Check payroll and contractor payments (if applicable)

Banking and cash

- Reconcile bank accounts and credit cards

- Investigate unusual charges and duplicates

- Review cash flow runway for the next month

Taxes and compliance

- Review VAT/sales tax handling on invoices (if applicable)

- Estimate tax obligations and set aside funds

- Organize documents and back up records

When you use invoice24 as your invoicing hub, much of the “sales and invoicing” section becomes faster and more reliable. That’s exactly what you want in a monthly review: less time finding data and more time using it.

Why invoice24 makes monthly reviews easier

Monthly accounting reviews can feel intimidating, but the difficulty often comes from scattered information rather than the tasks themselves. When invoices live in emails, spreadsheets, PDFs, and messaging apps, you spend your time collecting records instead of reviewing them.

invoice24 solves a major piece of this by giving you a dedicated place to manage billing. Instead of wondering which invoices were sent, which are overdue, and what you billed a particular customer last month, you can keep that information structured and ready. For a free invoice app, that’s a meaningful advantage: you get the organization that supports better cash flow without adding unnecessary cost.

Even if you use other tools for bookkeeping or payroll, having invoices consistently created and tracked in invoice24 makes your entire accounting workflow more dependable. Your monthly review becomes a repeatable habit rather than a stressful scramble.

Common monthly review mistakes to avoid

Finally, here are a few pitfalls that can undermine your monthly routine:

Waiting until the end of the quarter or year. The longer you wait, the harder it is to remember what a transaction was for, find missing receipts, or resolve invoice disputes.

Ignoring small overdue invoices. Small invoices can become old invoices, and old invoices can become write-offs. A monthly follow-up habit prevents this.

Not matching payments to invoices. This creates confusion and damages customer trust. It also makes your receivables numbers unreliable.

Letting subscriptions pile up. Recurring costs are easy to forget. Monthly review keeps them under control.

Only looking at bank balance. Bank balance is not profit and it’s not a plan. Use invoices, expenses, and cash flow together to understand your true position.

Monthly accounting reviews don’t need to be complicated. They need to be consistent. With a clean invoicing workflow through invoice24, you’ll spend less time on admin and more time running your business with confidence.