Before the clock strikes midnight on December 31, you need to square away several accounting tasks. Your accounting books should be organized, up-to-date, and ready for the transition into a new year.
Ready to start now? Utilize this time and prepare a year-end bookkeeping and accounting checklist. This checklist will not only help you in updating your company’s books and records but also set you up for starting off the next year on the right foot.
Review Your Books
The first step is to make sure that your books are up-to-date.
You can do this by:
• Accounting for all bills and invoices, even if they haven’t been paid yet.
• Review bank and credit card statements to confirm that they match.
• Recording any expenses that you paid for with personal funds.
Bookkeeping for your small business may initially seem manageable, but it can quickly become overwhelming. If you’re struggling, reach out for assistance before submitting your information for tax preparation.
Collect the Necessary Forms
Once January arrives, your accountant will request certain forms to close your books and file your small business taxes. Be sure to collect them as soon as possible to ensure a smooth start to the new year.
Here are common forms:
• FORM W-2
• FORM W-9
• SCHEDULE K-1
• FORM 1099-K
Profit and Loss Review
For small business owners, reviewing profit and loss accounts at the year-end is very important to evaluate the performance of a business and provide a basis for forecasting future performance.
A profit and loss statement not only provides information about a business's income and expenses but also enables you to increase your earnings by reducing unnecessary expenses and increasing income. Thus, by using the profit and loss account you can make projections for future revenue based on past sales and expected income.
Payroll accounting and payroll records go hand in hand. It is essential for you to accurately accrue all unpaid salaries and wages earned by employees as a liability in accounting at the financial year-end.
Account for Inventory
If you have an inventory of any kind in your business it is important to perform a physical inventory count before the end of the financial year. This will help you to determine the total value of inventory available on hand and how much has been damaged, stolen, etc.
Review Your Accounts Payable and Accounts Receivable
Another item on your year-end accounting checklist is to review your accounts payable and accounts receivable reports.
You might find invoices in accounts payable that you’ve paid or amounts in accounts receivable that haven’t been billed for. For the accounts receivable, check if anything looks incorrect or if there are some missing invoices. And while you’re at it, you should probably contact those who are late in paying it. And as for the accounts payable, ensure that they are also correct and go through each of them to check if they make sense.
Get Organized for the Next Year
Ending a year is like completing a chapter in your life or the life of your business. You can close that chapter and begin a new one in a way that sets you up for success with organized bookkeeping.
Use your year-end bookkeeping and accounting checklist to ensure you’re ready for the new year. It’s the perfect time to make significant changes to your process, try out new accounting software, or update your system with other recent accounting trends.
Reach Out for Help
Everyone deserves a supportive team of people who care. If you feel overwhelmed with year-end bookkeeping, reach out to an online bookkeeping service. Cloud Bookkeeping Inc’s team provides monthly bookkeeping and accurate financial reports. We’ll give you financial visibility throughout the year and deliver insights to make strategic business decisions.
Get in Touch with Us for Our Services
We don’t just say it, we deliver – our work speaks for us! Contact us for 30 mins of free consultation and opt for our Online Bookkeeping Service.
Cloud Bookkeeping, Inc.
3281 E. Guasti Road, Suite 700
Ontario California 9176
Tel: +1 (909) 952-3804