Preparing for Year End is a long and stressful task. Businesses can use this 10-step checklist to make preparing for Year End just a little bit easier.
When preparing year-end payroll and other year-end tasks, any bit of help goes a long way. The following 10 tasks, or checklist items, are things employers and managers can do to make year-end processes a little smoother.
Do your accounting records match all of your bank statements? It’s vital to compare deposits and expenses, fixing any errors and making adjustments so that what you have recorded is accurate. When you review bank statements (which we recommend you do every month), you might find some mistakes, which could be fraudulent activities. This is your chance to follow up and get things rectified.
It’s important to check credit card statements to make sure you’re not being overcharged. Flag any suspicious charges and follow up with your credit card company.
The more accurate your records are, the more reliable reports that you run will be. As we discussed in our last blog, keeping accurate and up-to-date accounting records is vital for every business.
Do your loan balances match what’s recorded in the financial statements? Also check that interest has been recorded accurately.
When was the last time you reached out to clients who owe you money? Make accounts receivable a priority right now.
Have you missed paying any of your vendors? Paying bills in a timely manner saves you from paying interest and creates a stronger relationship with your suppliers. We recommend asking for monthly statements from at least your main vendors to ensure that you have captured everything that you owe.
An inventory count should be completed at least once per year (and ideally close to your year-end). Upon completion of the inventory count, someone must complete a reconciliation between the physical count and the system and post any adjustments into your accounting system. This ensures that the value of the inventory is accurate on your company balance sheet.
Are your fixed assets recorded and classified correctly? Did you expense an asset purchased by mistake or did you sell an asset and forget to remove it from your fixed asset balance sheet accounts? By reviewing your Balance Sheet accounts, you can determine if items have been recorded properly or incorrectly. You should fully understand every balance that is sitting on your balance sheet and whether it truly should be recorded here or if it should actually be on your profit and loss statement.
Once you feel confident the Balance Sheet is accurate, you can run other reports, such as a Profit and Loss Statement (P&L). A P&L report shows the profitability of your business. Not only does it determine what revenue and costs are for a certain period, it can also help to forecast future sales and expenses.
Make sure that all of your journal entries are up-to-date and complete.
Preparing for year end is a long and difficult process. For tips for preparing for year end or to learn more about how EBC is already helping countless managers with their year-end preparation, contact us today.