You might be managing and juggling accounting processes to ensure a smooth financial transition for your business. QuickBooks makes it easy to close your books at the end of the year. The steps you take to close out your books will depend on what version of the software you are using.
This includes keeping track of invoices, receipts, and other documentation. In a paperless environment, it means keeping digital copies of all statements, invoices, and deposit records. Delivered as SaaS, our solutions seamlessly integrate bi-directionally with multiple systems including ERPs, HR, CRM, Payroll, and banks. But you don’t have to round out your business’ books on your own at year end.
Stay up to date on the latest accounting tips and training
Once all of your income and expenses are properly recorded, be sure to reconcile all of the bank and credit card accounts for your small business. Make sure that the income and expenses recorded in your accounting software match the totals from your official bank statements. If they don’t, there’s a discrepancy or mistake somewhere that you’ll need to address. To file 1099s on time, you’ll need to reconcile your clients’ bank accounts for the year to ensure all payments are included when you issue the forms.
- Thankfully, there are many ways for accounting professionals to maximize the success rate of their year-end closing activities.
- Your cash flow statement can show you the timing in which money comes in or goes out of your business.
- One of the most important things you can do to give yourself an advantage in the new year is to plan your accounting tasks in advance.
- To make things even easier for you, we’ve also created a printable end-of-year accounting checklist so that you can mark your progress.
Look for any blatant asset errors and reclassify them to the correct account. One thing that you should do is to take a peek through the details of your asset accounts. You want to be looking for any glaring errors that you mistakenly booked to an asset account.
Account for inventory
To ensure you securely save your accounting data for the new year, add backing up information to your year-end closing checklist. Prior to year-end, review both your accounts receivable and accounts payable to ensure you settle all collections and debts. If you use accounting software, you may even be able to attach receipts and documents to transactions to better track them. Your business balance sheet shows your assets, liabilities, and equity and tracks your company’s financial progress.
Once you’ve completed every step and checked off each part of your Year-End Checklist, you can officially close your books! An accounting firm undergoing the year-end closing process should have easy access to its income statement. Financial statements help you understand your business’s financial standing and (hopefully) make tax season less of a burden on your company. Ultimately, a year-end inventory count is a vital part of maintaining accurate financial statements and ensuring the health of a business. As a bookkeeper, it’s your job to make sure the year-end inventory adjustments have been properly recorded and that the cost of goods sold has been adjusted. Keeping a record of all accounting data for future reference is critical to all businesses.
Step 12: Double-Check Payroll Taxes
We save you money the moment you hire us by cutting out the expensive cost of hiring an in-house CFO. Most people hate getting hit with any unexpected bills and taxes should be treated no differently. If you do owe at least you will be prepared and you will not be surprised by your tax liability. Most businesses are aware that they should request a W-9 form from their vendors, but very few actually follow through and complete the task.
- Once you’ve closed your books, keep the momentum going and start preparing for tax season.
- It’s especially important if there were any changes in staff or accounting software during the year.
- Doing so helps your accountant double-check that everything is up to date and make adjustments if needed.
- Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training.
- Take a deep, calming breath and get ready to tackle those accounts with a plan for streamlining the process.
For example, CPACharge allows you to send your clients a Quick Bill, instantly generating a payment request with a convenient link to pay your bill by credit card or eCheck. These Quick Bills can also be tracked to see if the client has viewed the bill and whether their payment is on the way. You may also need to follow up with the relevant parties to ensure there are no issues on their end. Creating a proper follow-up process with the business can help minimize outstanding invoices. Next, send out a mass email reminding these clients of their outstanding balances.
Analyze financial statements
Your accountant can also assist you with running depreciation, or you can run depreciation yourself using accounting software programs, such as Xero and QuickBooks. If the IRS suspects that your small business deductions are actually personal expenses, then you are in great danger of an IRS audit. That’s why it’s essential to keep your business expenses and personal expenses distinct. Some accounting programs, such as QuickBooks Self-Employed, allow you to separate expenses easily.
Essential Monthly Bookkeeping Tasks to Include in Your Year-End Checklist
You have followed through the checklist thus far and all before year-end…good for you. However, don’t stop reading because this is by far the most important step. You need to do a year-end tax review with your CPA to get an estimate on your tax liability. Whatever you decide to do, make sure you have a plan in place to back up those precious accounting records for your business. If your business has inventory, complete an inventory check before year-end.
One of the most important things you can do to give yourself an advantage in the new year is to plan your accounting tasks in advance. Businesses also need to account for expenses incurred but not yet paid. The first entry records any revenue not previously added to the ledger.
If you find discrepancies between your count and balance sheet, make adjustments. If you want to wrap up your books for year-end, try to collect the money that customers owe to your business. This means putting in a little legwork and trying to collect past due invoices before the new year. Use your balance sheet at year-end to ensure your accounts balance and everything is in order for the new year.