Books can look finished, with every transaction categorized and a tidy profit and loss, and still be wrong in ways that only appear when a lender, a partner, or a tax preparer starts asking questions. This one-page checklist gives you six checks to run each month so you know the difference.
Download the Month-End Checklist (PDF, one page, free)
The six checks
- Every bank and card account ties to its statement, to zero. Equal, not close. If it does not tie, list the unresolved transactions instead of posting an adjustment to force it closed.
- Security deposits are a liability and match the cash you hold. A deposit balance that does not match the account where the money sits is a problem waiting for a move-out dispute. How deposits should be recorded.
- Mortgage payments are split, and the loan balance matches the lender. Only interest is an expense. How to record the split.
- Repairs and improvements are separated. Large items in repairs, and small maintenance in capital improvements, both deserve a second look. The test for telling them apart.
- Every transaction has a payee and a property. Blank payees and “miscellaneous” are transactions nobody can explain later, and a transaction with no property cannot appear in a per-property report.
- Money moving between your entities nets to zero. What one entity says it owes another should equal what the other says it is owed. Keeping multi-LLC books straight.
What to do when a check fails
A failed check is information, not a crisis. It tells you which account, which dates, and which kind of transaction to look at first. If you outsource your bookkeeping, ask to see the output of each check. If your books are months behind, catch-up bookkeeping is how we start, and our real estate bookkeeping service runs these checks every month.
This checklist is general guidance, not tax or legal advice; your CPA decides how items are treated on your return. If you would like us to look at your books, book a free discovery call.
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