Year-End Accounting and Bookkeeping Checklist

If you’d like help reviewing your books before year end, please add yourself to my calendar using the green button below. It’s also a solid idea to review your firm’s practices and see where any improvements can be made. A more streamlined firm can produce faster results and better serve its clients in the long run. Thoroughly investigate these records and see if any discrepancies are discovered. It may be necessary to adjust one of your records to make the balances equal.

If you’re still confused on where to start, reach out to our team of accounting experts to help you make sense of your accounting and year-end. Record year-end accruals, if you are not already recording monthly, e.g. depreciation, payroll, services received not yet billed for, payments made for services not yet received, deferred revenue. Running your aging reports on both accounts receivable and payable may reveal some problems or maybe just some errors. This includes government contributions, special tax exemptions, and private grants, which must be properly accounted for in your financial statements.

Year-End Accounting is an Accounting process undertaken by companies at the end of each Financial Year to summarize and analyze business activities for the entire year. Companies carry forward the balances to new year accounts and close the previous year accounts. An accurate Year-End account process helps companies to be better prepared to start the next year with new accounts of the company.

Compile all financial statements

If you use Block Advisors’ professional payroll services, we can take the load off this somewhat complex task. See how our small business bookkeeping service can take on your paperwork and save you time with a free consultation. If you operate on a fiscal year instead of a calendar-year schedule, you or your bookkeepers can still use this information as an end of financial year checklist. For example, taxes, which are based on a calendar year-end, are still often due on April 15, regardless of a company’s fiscal year-end. Thus, in many cases, a Dec. 31 fiscal year-end date is more conducive for calculating taxes due.

You should consult with a licensed professional for advice concerning your specific situation. It is current at the date of posting and changes to laws and regulations may result in the information becoming outdated. It is recommended that readers get advice from a tax professional before making any final decisions. One of the things to look for, is whether the balances are significantly higher or lower than you had expected. Other things to look for include an unexpected negative balance or any unexpected extreme differences from previous years. Once you’ve completed your inventory counts, and have reconciled your point-of-sale system, ask yourself, Is there any room for improvement?

You now have a complete picture of the money received during your financial year and the expenses incurred to maintain that income after all adjustments have been made. Just as you have done every month, take a moment to analyze your year-end financial statements. If this isn’t your first year in business, assess how your company performed last year and set objectives for this year. Additionally, this is a wonderful opportunity to export data for your accountant to complete your annual tax returns. As the end of the year draws nearer, CFOs are getting ready for the final sprint to close one year ahead of rolling out budgets for the next. Keeping your books balanced entails keeping a detailed record of all debits and all credits to each account.

Review and close out all outstanding accounts payable

I think many owners dislike taxes so much that they are actually afraid to see what their potential tax liability is. You need to review your taxes with your CPA prior to year-end for two very important reasons. When it comes to cleaning up your end-of-year accounts, the best place to start is with source documents like receipts and invoices. Whether you work with physical files, or you’ve switched to a paperless system, you’ll still need to make sure all your records are accounted for.

To give you a headstart on next year’s bookkeeping checklists, Jetpack Workflow created 32 free templates for bookkeeping and accounting firms so you can kick off the new year on the right foot. Additionally, businesses need to adjust their inventory levels to reflect the actual physical count of what they have on hand. Doing this ensures their financial statements accurately document the reality of what the business owns.

We understand that some of this may be more than you want to take on at year-end. For over 30 years, Valley Business Centre has been providing comprehensive bookkeeping, payroll, and tax services to our clients in Whistler, Squamish, the Sea to Sky Corridor, and metro Vancouver B.C. Valley Business Centre provides reliable and effective services to all clients.

– Complete the appropriate forms from employees and contractors

There’s always an explanation for why numbers don’t match, from human error to incorrect invoices, but a proper approach to reconciliation can ensure each and every number you report is accurate. For many companies, there will be major tasks that will need to be completed before the year actually comes to an end. This can mean setting up templates, populating current data, setting up scenarios in a financial database software, or even organizing paperwork. To the extent possible, build these kinds of tasks into your timeline can guarantee a smooth start to your process as soon as the end of the year comes to pass.

Collection agencies can help you collect past due invoices for a price. Generally, the collection agency keeps a portion of the total amount due. By mapping out what needs to be done and when, you avoid needless stress and save yourself valuable time. Remember, if you file W-2s or 1099s on paper forms, you should have the proper paper required by the IRS. Like W-2s, the deadline for sending 1099s to your vendors and contractors is January 31. If you fail to file a required 1099, you may be subject to penalties from the IRS.

Record Annual Journal Entries

This is a good time to take a look at your income statement and balance sheet to make sure that things look correct, or as they should. You can rest assured that we will work closely with you to create actionable business plans and accurate financial reporting. We offer our toolkit of financial intelligence that will be your greatest asset for business growth. Asset accountsOnce you’re satisfied that everything is in order, you should run a trial balance to ensure debits equal credits across your accounts. This is also a great way to check for abnormal account balances and potential posting errors.

These are key documents that your company’s management team will use when they review results over the next few months. As well as lenders when they consider lending money to your company if needed. One of the major purposes for closing your books at the end of each accounting period is to allow you to prepare financial statements that give you a picture of your business’s financial status. The financial statements prepared for most small businesses are a balance sheet and an income statement. The end of the year is a great time to assess where you stand financially and how your current financial situation compares to previous years. Use your preferred accounting software or system to generate a financial report.

Accounting software may create an automatic closing date as well as a password so transactions from before the closing date can’t be changed. “The books” are a business’s revenue, expense, End of year bookkeeping and income summary reports. Business owners can close their books by zeroing out their income and expense accounts and then plugging net profit (or loss) into the balance sheet.

The year-end close, although a recurring task, can pose significant challenges for accounting teams, adding to their already demanding workload and causing additional stress. The next section will explain why closing the financial year can become such a difficult task for accounting teams. Disorganized receipts can put your small business at risk of sloppy and inaccurate books. Not to mention, messy records can increase your chances of making errors on your business tax return and cause more issues in the future.

The easiest way to wrap up one fiscal year and get ready for the next is with a systematic approach to getting your books organized. Follow these simple steps and bring your CPA the cleanest set of books you ever had. One last thing, don’t forget that tax review before year end…it’s just that important.

As the calendar year-end quickly approaches, your business fiscal year-end, or 12-month business cycle, may also be coming to a close. Even if it isn’t your Fiscal Year-End, this is still a good time to make sure your books are in order for the start of a new year. However, it can make things clear if there are problems, such as bad inventory management or errors in stock. If there’s a considerable discrepancy between the inventory count and your bookkeeping, it should be corrected promptly. A missing or incorrect name or Social Security number can lead to penalties.

These records are then used to generate reports that can tell a business owner the financial status of their enterprise. This process helps owners stay on track with business goals and prepare for filing their income tax returns. Next, look at your last two quarters and break them down by weeks to help you prepare a 90-day cash flow forecast for the first quarter of the new year. You always want to stay a quarter ahead so you can plan for how much cash you will have in the future.

Payroll Essentials

Check your bills’ payment status about a week after they are sent by setting a reminder on your calendar. The end of the year is always a busy time for businesses, and you’ll need to review your clients’ financial statements from the past 12 months. For example, many retail companies have a fiscal year that differs from the calendar year due to the heavy sales cycle during the holiday season. Accounts receivable is the amount that your customers owe you after purchasing your goods or services on credit. It’s a running list of invoices still unpaid and clients that still owe money for work already completed.

• No matter what your ratio, if you have outstanding receivables, it’s a good idea to collect past due payments before the end of the year.
• If not, cancel them right away so you don’t get charged for another year.
• It is always better to prevent any surprises at tax time, that could be avoided with this review.
• The good news is, there are solutions available that can simplify the end-of-year accounting process and make it less daunting.

Closing year-end can be an overwhelming task without the time or right resources to help you out. While you might think this post is an end of financial year checklist for bookkeepers, it is directed toward small business owners. Before you can start to mark tasks off your to-do list, you’ll need to gather your important bookkeeping and tax forms and documents. Analysts rely on comparative data to identify trends and create forecasts. As such, analysts must be careful to compare two companies over the same time period.