Financial Statements
Use monthly comparisons to spot missing income, duplicate expenses, new subscriptions, margin changes, and debt issues.
Best for: owners reviewing reports after close or before sending files to a professional.
Important: This article is general bookkeeping education. It is not tax, legal, payroll, or accounting advice. Rules and correct treatment can depend on entity type, industry, location, software setup, and professional judgment.
Compare the current month to prior months to find unusual changes, missing categories, new balances, and possible coding mistakes.
What this means
Month-over-month review is a reasonableness check. It asks whether the numbers match what you know about the business.
Trend review catches coding drift, missing recurring expenses, duplicate charges, and performance changes.
Core concepts
Compare sales to prior months and source reports.
Look for new vendors, missing recurring costs, and unusual spikes.
Review gross profit or direct costs when applicable.
Review cash, debt, receivables, payables, and tax liabilities.
Step-by-step workflow
- Gather the source records. Save statements, receipts, reports, screenshots, contracts, confirmations, or notes that support month-over-month financial changes.
- Identify the business event. Decide what actually happened before choosing a category or changing a report.
- Match the money movement. Compare the bookkeeping record to bank, credit card, loan, payroll, or platform activity.
- Choose the right treatment. Separate income, expense, asset, liability, equity, transfer, and owner activity instead of using one catch-all category.
- Review for duplicates and timing. Look for repeated entries, missing transactions, old balances, refunds, chargebacks, and period cut-off issues.
- Save final notes. Keep a clear explanation so the owner, bookkeeper, or accountant can understand the decision later.
Review checklist
- The period, account, and source report being reviewed are clearly identified.
- Transactions are not duplicated or counted in the wrong period.
- Unclear items are placed on a question list instead of guessed.
- Supporting documents are saved in the monthly records folder.
- The final report or template includes notes for unusual activity.
Common mistakes to avoid
- Guessing from the bank description only. Bank descriptions are helpful but often incomplete.
- Using miscellaneous too often. Too many miscellaneous entries make reports less useful.
- Skipping documentation. A correct number is harder to defend when the source is missing.
- Ignoring balance sheet effects. Some activity affects assets, liabilities, or equity rather than the P&L.
Example review map
| Area | What to review |
|---|---|
| Documents | Confirm the files supporting month-over-month financial changes are saved and named clearly. |
| Category | Confirm the category describes the business purpose and account type. |
| Balance | Confirm any related bank, card, loan, tax, payroll, or owner balance makes sense. |
| Questions | List missing details and assign follow-up before closing the month. |
| Handoff | Save a short note for the owner, bookkeeper, accountant, or tax preparer. |
FAQ
Should seasonal businesses compare to last year?
Yes. Year-over-year comparisons may be more useful for seasonal activity.
Should I write notes for every change?
No, but note meaningful changes and unresolved questions.
Can I use this with a KanderBooks template?
Yes. Use the article as a workflow guide, then use the matching KanderBooks template to organize amounts, notes, dates, confirmations, and review questions.
When should I ask a professional?
Ask a qualified bookkeeper, accountant, payroll provider, or tax professional when the item affects taxes, payroll, loans, prior-period reports, legal compliance, or financial statements used outside the business.
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