Quick answer: Every month, record all sales, purchases and expenses; reconcile every bank account; match purchase invoices with GSTR-2B; compute TDS and GST liabilities; review receivables and payables ageing; and close the month with a trial balance and a short MIS report. Clean monthly books make GST, TDS and ITR filing fast and accurate.
Most compliance problems — mismatched GST returns, missed TDS, surprise tax bills — start with books that are months behind. A monthly routine prevents that.
The monthly checklist
- Record all sales invoices, credit notes and receipts
- Record purchases, expenses and payments with supporting bills
- Reconcile every bank and cash account
- Match purchase invoices with GSTR-2B and follow up on missing ITC
- Compute GST liability and prepare data for GSTR-1 and GSTR-3B
- Compute TDS on payments and deposit by the due date
- Review receivables ageing and follow up on overdue amounts
- Review payables and plan payments
- Record payroll, PF, ESI and professional tax
- Close the month with a trial balance and MIS
Why it matters
Monthly books give you timely information on profitability and cash flow, support loan applications and stock statements for banks, and make year-end audits smoother.
Frequently asked questions
Which accounting software should a small business use?
Popular options include Tally and cloud-based tools. The best choice depends on your transaction volume, GST needs and whether multiple users need access.
Can bookkeeping be outsourced?
Yes. Many businesses outsource bookkeeping to a CA firm and receive monthly reports.
How long should books be preserved?
Books of account must be preserved for the period prescribed under the Companies Act, Income-tax law and GST law — generally several years.
Related: Accounting & bookkeeping service · GST return filing