Year End Bookkeeping Checklist

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Now is the time for Year End Tasks such as final Bookkeeping and Reconciliation that will help prepare you for the start of a new fiscal year and get your business ready to file your taxes. End of the Year Bookkeeping can be tedious work so we’ve compiled compiled a helpful list of tips and tricks that will make the whole process easier and minimize stress. As always, we are available to help you with any of these tasks.

  • Gather Your Financial Statements
    Step 1 is to gather all the necessary financial statements for your business. This will give you a view of your entire business activity for the year. You do this by consulting your accounting books. The purpose here is to generate a yearly report of your company’s financial history. From this report you will be able to generate an accurate present state, which is a solid foundation on which to forecast the company’s financial future
  • Collect All Past-Due Invoices
    Close out any financial activity in the current year by collecting any invoice that is still due. You can start by sending out reminders to clients who have overdue invoices. After the reminders are sent it’s time to directly contact the remaining clients with outstanding balances. In this current climate it may be wise to offer options to help ease burdens such as being open to set up payment plans and flexible terms. Any payment plan should be treated as a financial contract and carefully documented. For clients who still refuse to pay, you may want to consider hiring a collection agency to help with the task.
  • Pay Bills From Vendors and Contractors
    In addition to making sure all of your customers pay you, you should confirm that you’ve paid any vendor or contractor debts your small business has accrued.
  • Collect W-9 & W-4 Forms
    Step 3 involves two forms that you have to pay special attention to collect, the W-9 and W-4 Forms, which deal specifically with outside contractors and employees. The W-9 form is required by the IRS if you paid outside contractors (for any service provided) a sum equal or greater than $600. Have your outside contractors fill out a W-9 form, which you will in turn use to fill out the 1099 IRS form. It’s a good idea to provide the W-9 to your contractors, freelancers and other collaborators at the start of your work relationship. You should have a W-4 on file for each of your employees. You will need to provide a W-4 even for terminated employees.
  • Double Check Your Payroll
    Double check your payroll. You should ensure that your yearly payroll tax liabilities match your quarterly payroll returns. You will issue a form W-2 for each your employees. Before you issue the W-2 double check all the payments and salaries, commissions and bonuses. Also it would be wise to check that all the information is filled out correctly such as names and Social Security numbers. Once you have confirmed that all information is accurate you can generate the W-2 form for each employee.
  • Check Your Inventory
    Reconciling your inventory is best done at the end of the year. If your business stores inventory you need to get an accurate count of the materials and supplies you have on hand. This may sound like a big job but this task is very important as it can reveal any errors such as mismanagement, system errors or even fraud you were unaware of. This will give you the opportunity to correct any errors and reconcile your POS (point-of-sale) system.
  • Record Expenses
    Now is the time to catch up if you’ve fallen behind on recording and categorizing your expenses. You should verify you’ve got all the receipts entered into the system and go through everything once more to ensure you haven’t missed anything. Not only is this crucial for accurate record-keeping, but it will also help your accountant find all of the tax-deductible expenses your business qualifies for. Recording your expenses throughout the year can help make this process much simpler.
  • Reconcile Your Bank Accounts
    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. This means that every monthly bank statement as well as the final full-year statement is properly reconciled and matches the accounting records that you have. It’s easiest to do the bank reconciliations once a month so that it is not such a big job at the end of the year. If done correctly, your bank statements should match the balance in your books. If they do not match, you may need to do some investigating to find the discrepancy. Don’t forget that besides your major business bank account, you may also need to take into account the following:
    • Savings Account
    • Petty Cash
    • Paypal or Stripe (or similar)
    • Credit Card or Credit Line
    • Loan Account

This list is meant to be a helpful resource to assist you in your year end bookkeeping tasks. Following a checklist can make things more streamlined and easier to complete. Many of the tasks outlined here can be performed month to month, which makes the year end bookkeeping much more efficient. You can save this list to use throughout the year to help you get a jumpstart of next year’s tasks. As always, R&D Legal Bookkeeping is available to assist you with these tasks and to help with ALL of your bookkeeping needs.

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