7 Mistakes You're Making with Monthly Bookkeeping Services (And How to Fix Them)
You’re paying for monthly bookkeeping. Your books are technically "done" every month. So why does tax season still feel like a disaster? Why can’t you answer basic questions about your cash flow without digging through three spreadsheets and a mountain of email?
Here’s the uncomfortable truth: most business owners aren’t getting what they think they’re getting from their monthly bookkeeping service. And it’s not always the bookkeeper’s fault—sometimes it’s how you’re using (or not using) the service that’s the problem.
Let’s break down the seven most common mistakes we see business owners make, and more importantly, how to fix them before they cost you money, time, or your sanity.
Mistake #1: You’re Treating Bookkeeping Like a Retrospective Task
The biggest mistake? Thinking of bookkeeping as something that happens after the month is over.
You close out January on the 31st, and sometime around February 15th, your bookkeeper gets access to your statements. By the time they reconcile everything and send you reports, it’s almost March. You’re making decisions for your business today based on data from six weeks ago.
That’s not bookkeeping. That’s accounting archaeology.
How to Fix It:
Move to real-time or near-real-time bookkeeping. Your books should reflect what’s happening now.
- Connect your bank feeds directly to your accounting software.
- Record transactions as they happen, not in batches at month-end.
- Review your financials weekly, not monthly.
If your bookkeeper is still asking for statements at the end of the month instead of accessing live feeds, you're already behind.
Mistake #2: You’re Skipping (or Delaying) Monthly Reconciliation
Here’s a question: when was the last time your bookkeeper reconciled your accounts? If the answer is "I think they do that?" or "Probably at year-end?", you have a problem.
Monthly reconciliation is the process of making sure what’s in your software matches what’s actually in your bank account. Skip it, and you get duplicate transactions, missed expenses, and a general sense of dread every time you look at your books.
How to Fix It:
Reconciliation should happen every single month, without exception. If your bookkeeping service doesn't include this as a standard part of the process, you’re not getting bookkeeping—you’re getting data entry.
Ask your bookkeeper:
- "Are all accounts reconciled monthly?"
- "Can I see the reconciliation reports?"
- "What’s your process if something doesn't match?"
If they can't answer those questions clearly, it's time to have a bigger conversation.
Mistake #3: You're Still Mixing Business and Personal Expenses
We know. You meant to open a separate business account. You just haven't gotten around to it yet. And in the meantime, you're Venmo-ing yourself for business expenses, paying vendors from your personal checking, and treating your business credit card like a personal emergency fund.
Your bookkeeper is doing their best, but they can't read your mind. Every mixed transaction is a guess. And guesses don't hold up in an audit.
How to Fix It:
Open a dedicated business bank account. Today. Not next month. Not after tax season. Today.
Then:
- Use it exclusively for business transactions.
- Pay yourself a regular salary or owner's draw (not random transfers whenever you feel like it).
- If you must pay for something business-related with a personal card, document it immediately and reimburse yourself properly.
Need a gut check on whether your expenses are actually separate? Read The Coffee Shop Test: Is Your Business Spending Actually Separate?
Mistake #4: Your Chart of Accounts Is a Mess (Or You Don't Even Know What That Means)
Your "chart of accounts" is the backbone of your bookkeeping. It's the list of categories where every transaction gets sorted: revenue, expenses, assets, liabilities, equity.
If your chart of accounts is set up wrong, everything downstream is wrong. Your P&L is meaningless. Your tax prep takes twice as long. And your bookkeeper is stuck playing a monthly game of "where does this actually go?"
Common chart of accounts disasters:
- A "Miscellaneous" category with $30,000 in it.
- Contractor payments lumped into "Office Supplies."
- Personal expenses hiding in "Business Meals."
- No separation between cost of goods sold and operating expenses.
How to Fix It:
Have a professional set up your chart of accounts before you start doing your own bookkeeping (or hire someone to do it). It should be:
- Customized to your industry.
- Aligned with IRS categories for easier tax prep.
- Clear enough that anyone on your team can categorize a transaction correctly.
Once it's set up, train everyone who touches the books on how to use it. And if your bookkeeper is constantly creating new random categories, that's a red flag.
Mistake #5: You're Not Keeping Receipts (Or You're Keeping Them in a Shoebox)
Let's say your bookkeeper records a $500 expense for "office supplies." Great. But three years later, the IRS asks: "Can you prove that?"
If your answer is, "Uh, I think I have the receipt somewhere..." you're in trouble.
Bookkeeping without documentation is just creative writing. Your bookkeeper can enter all the data in the world, but if you don't have the receipts to back it up, those deductions are at risk.
How to Fix It:
Implement a receipt management system. Options include:
- Apps like Dext or Hubdoc that let you snap and store receipts instantly.
- A dedicated folder in Google Drive or Dropbox organized by month and category.
- A simple rule: no receipt, no reimbursement (this forces accountability).
Your bookkeeper can't create receipts for you. That's your job. But once you have a system, they can help organize and attach them to the right transactions.
Mistake #6: You're Ignoring Sales Tax (Until It's Too Late)
If you sell physical products, digital goods, or services in certain states, you probably have sales tax obligations. And if you're not tracking it properly, you're either:
- Overcharging customers and pocketing tax you owe the state (illegal).
- Undercharging customers and paying the tax out of your own pocket (expensive).
- Ignoring it completely and hoping no one notices (really bad idea).
Sales tax rules are complicated, vary by state, and change constantly. Your monthly bookkeeping service should be tracking it, but only if you tell them what you're selling and where.
How to Fix It:
- Register for sales tax permits in every state where you have nexus (a taxable presence).
- Use accounting software that calculates and tracks sales tax automatically.
- Review your sales tax liability monthly, not quarterly or annually.
- File and pay on time, every time (late fees add up fast).
If you're not sure whether you need to collect sales tax, talk to your bookkeeper or CPA. "I didn't know" is not a defense the state will accept.
Mistake #7: You're Guessing Your Way Through Bookkeeping
Here's the scenario: You hired a monthly bookkeeping service, but you're still the one entering transactions, reconciling accounts, and trying to figure out what goes where. Your bookkeeper reviews everything at the end of the month and sends you a report, but by then, you've already made a dozen categorization mistakes that compound over time.
You're paying for a service, but you're still doing the work. And because you're not 100% confident in what you're doing, the work isn't great.
How to Fix It:
Get clear on what your bookkeeper is actually doing versus what you're doing. Monthly bookkeeping should mean:
- Your bookkeeper is entering, categorizing, and reconciling transactions.
- You are reviewing reports and asking questions.
- Everyone knows who's responsible for what.
If you're still the one doing data entry, you don't have a bookkeeping service: you have a bookkeeping reviewer. That might be fine if you want to stay involved, but it defeats the purpose of outsourcing.
For a breakdown of what you should actually expect, read Looking for Monthly Bookkeeping Services? Here Are 10 Things You Should Know.
The Bottom Line: Monthly Bookkeeping Should Make Your Life Easier, Not Harder
If your monthly bookkeeping service feels like a chore, a mystery, or a source of stress, something's broken. Good bookkeeping should give you clarity, confidence, and time back in your week—not create more work.
The fixes above aren't complicated, but they do require intentionality. Set up your accounts properly. Keep your receipts. Reconcile monthly. Don't guess.
And if your current bookkeeper isn't helping you do those things? It might be time to find one who will.
Ready to stop guessing and start knowing exactly where your business stands—every single month?
Let’s get your books working for you, not against you.
See how we can Support You Toward Your Financial High Point