All You Need to Know About Year-end Bookkeeping Checklist.
Year End Bookkeeping Checklist
The end of the financial year is fast approaching, and it is important to ensure that you have your bookkeeping in order. Closing the books at the end of the year can be intimidating, especially if you are unfamiliar with the process.
However, creating an end of year bookkeeping checklist can help businesses ensure a smooth transition into the new year. In this article, we'll provide a brief year end bookkeeping checklist that businesses can use to make sure their books are in order.
What is the End of Year Bookkeeping Checklist?
Year-end accounting is a process that businesses undertake at the end of a fiscal year to close their books, manage accounts and prepare for filing taxes. The end of year bookkeeping checklist is designed to ensure that all necessary steps are completed before closing out the financial year.
A year end bookkeeping checklist may help you remember all the tasks you need to complete before moving to the next fiscal year. Noting the items down or typing them into a checklist app can help you keep track of what needs to be done. Here’s the end of year bookkeeping checklist:
Start by Saving Your Documents
To prepare yourself well for the fiscal year, it is important to save all relevant documents. This includes bank statements, payroll reports, inventory counts, loan statements, and any other financial records you have been keeping for the year.
Prepare a Closing Schedule
Of course, you don't want to be left with a pile of documents that you can no longer manage. Instead, create a closing schedule and determine the order in which tasks are to be completed. Create a calendar with closing dates to help you keep track of the timeline for when each task should be completed. This can help you close out your fiscal year on time.
Collect All the Outstanding Invoices and Receipts
If you have any outstanding invoices or receipts, now is the time to collect them. Make sure that all invoices are paid and that all records are properly documented before the end of the year. Consider speeding up this process by using automation software that includes digital receipt capture. This makes it easy for the end of financial year checklist for bookkeepers to be able to upload their paper expense receipts instantly.
Organize Your Books
The accuracy of your information is very crucial at this point. If you've organized your books throughout the year, then the process may be simple. Check all the numbers to ensure accuracy and reconcile any discrepancies. Make sure you check all your credit card and bank statements against the information you have in your books. Hire a bookkeeper or an accountant to help you if needed.
Update Your Accounts
As the financial year comes to an end, it is important to update all of your accounts and adjust for any changes that have occurred throughout the year. This includes adjusting for inflation, updating inventory values, and depreciating assets as necessary.
Prepare Your Important Documents
Prepare the documents that will help you complete your checklist. This includes:
A balance sheet shows the assets, liabilities, and net worth of a business. It is the starting point for all financial analysis, including budgeting and forecasting.
An income statement provides an overview of the company’s revenue, expenses, and profits over a specified period of time. It can be used to help make informed decisions when it comes to managing your finances.
Cash Flow Statement
A cash flow statement will show you how much money is coming in and going out of your business. This can help you understand the financial health of the company and identify areas where there may be a need for improvement.
Review Accounts Payable and Receivable
Before the end year, review all accounts payable and receivable to make sure that all payments have been made. Make sure that all bills are paid, any outstanding invoices are collected, and all payments are up to date.
Make sure you check for missing invoices in the accounts receivable and contact customers who haven’t paid on time. In the accounts payable, address any late bills and follow up on items that may still be sitting in the queue.
Backup all your financial data, including accounts receivable and payable, payroll information, bank statements, and other important documents. This will make it easy to access the records in the future if you need to review them or use them again. You wouldn't like to lose important accounting information from the past years.
And to ensure your data is safe, have a reliable backup system in place to store all of your documents and financial information. This can be stored on an external hard drive or cloud storage service such as Google Drive, Dropbox, etc.
Review Vendor and Lender Paperwork
If you have any contracts or business agreements with vendors, lenders, suppliers, or other organizations, it is important to review these documents before the end of the financial year. Make sure all information is up-to-date and that nothing has changed in terms of interest rates or fees.
Examine Your Business Financial State
At the end of the financial year, it is important to conduct a comprehensive review of your business’s financial health. Look for patterns or trends in expenses and profits that could be affecting your bottom line. Then use this information to adjust your strategy going forward.
Take a physical inventory of all items in your business. This includes any raw materials, finished goods, parts, and office supplies that are necessary to keep the business running smoothly. Be sure to record accurate numbers for each item so you can use them when filing taxes and creating financial reports.
Evaluate Your Tax Strategies
When it comes to taxes, there are certain strategies that can be used to help minimize your tax liability. For example, consider investing in a retirement account or taking advantage of deductions and credits that can reduce your overall taxable income. Consider talking to a tax lawyer to ensure you are taking advantage of all the available tax strategies.
Audit Your Financial Statements
It is important to audit your financial statements at the end of the year. This will help you identify any discrepancies or errors that may have occurred and provide a better understanding of your company’s financial situation. You can also use this opportunity to update the information on the statements if needed.
Avail the Necessary Documents for Your Accountant
Once you have completed all of the above, provide your accountant with all the necessary documents to complete the year-end procedures. This will save time and money, as well as ensure accurate reporting. This will also make the process easier for the end of the financial year checklist for bookkeepers and ensure you get the best tax return possible.
Get Ahead and Start Accounting for Next Year
The bookkeeping end of year checklist is an important step to help you close the books on the current financial year and get ready for the next one. Start planning ahead now by gathering all of your documents, setting up a budget, and familiarizing yourself with tax laws and regulations. This will make it easier to transition into the next financial year without any hiccups. In addition to the bookkeeping end of year checklist be sure to include Qbox for your go-to user friendly software to securely share important documents with your clients. Sign up with Qbox here and get your first 30-day free trial.