If you are just now starting to close out your books for last year, you may be a little panicked because you’re a bit behind. Don’t stress out too much though—Back Office Support Solutions is here to help you. Not only can we offer you this checklist for closing your company’s books, but we can also help you close out your books, prepare your taxes, and complete a variety of other back office tasks for you and your business.
Year End Accounting Checklist
Reconcile Your Bank Accounts
All of your book balances need to be equal to your year-end statements. Especially if you have been entering in all your numbers by hand, you must ensure that all your bank statements, credit cards, and money accounts are reconciled properly. Even if you have accounting software, double check all the numbers. The best way to confirm that your bank accounts are reconciled correctly is to hire an experienced team of experts, like the one at Back Office Support Solutions, to review your bank accounts and reconcile them properly.
Review Payroll Expenses and Profit & Loss Statements
Make sure that your monthly and year-end payroll expenses match up. You will need to confirm this in order to fill out the annual IRS Form 940, as well as to reconcile your total expenses for the year. Additionally, your profit and loss statements need to be thoroughly reviewed to ensure that everything is categorized correctly. If categorization is troubling to you, or if you’re unsure about your payroll taxes, it is best to hire a professional from Back Office Support Solutions to look over your numbers and help you close out the books.
Evaluate Accounts Receivable and Invoices
Be sure that you have sent out your year-end invoices, and also make certain that all of your sent invoices have been paid. It’s easy for an invoice or two to go unnoticed, so make sure you thoroughly evaluate all of your invoice records, or you could be faced with an understated or overstated account at the end of the year. Also ensure that all of your revenues are recorded in the proper time period.
Analyze Fixed Assets and Depreciation Expenses
If you made any large fixed asset purchases this past year, they should be recorded as such on your balance sheet. Confirm your current inventory of fixed assets, and record details of sales, disposal, or depreciation as appropriate. Utilizing a depreciation schedule can be very overwhelming and complicated, so it’s best to hire a back office expert to take care of this task for you.
Run Taxable Sales Report
If you pay sales tax, you need to run a year-end taxable sales report and ensure that you have paid what you owe. Record correct amounts to help with projections for the future year.
Fill Out W-2s and 1099s
If you had any employees or subcontractors in the last year, you must fill out the proper forms to correctly report how much you paid them. W-2s go to full-time employees and 1099s go to subcontractors. These forms are supposed to be sent to individuals by the end of January. If you’re concerned because you’re behind on this, get in touch with Back Office Support Solutions right away so we can help you get back on track.
Ensure Inventory Balance Is Properly Stated
Your inventory should be recorded as of December 31st. You need to make sure your inventory is valued properly as well, so if anything is worth more or less than it originally was, that needs to be noted on your balance sheet. Your tax preparer is going to need thorough records of your inventory throughout the year, including the inventory balance as of January 1st, the inventory balance as of December 31st, the cost of purchased inventory from the entire year, and the amount of sold inventory from the entire year. Ensuring that this information is recorded properly will help out a great deal in closing your year-end books without complications.
Close Out Equity Accounts
Certain equity accounts need to be closed out from the prior year to ensure proper statement of your financials. Your temporary accounts, such as profit & loss and dividend accounts, should be closed out to your Retained Earnings or permanent equity account. The way to do this differs depending on your company filing status, so it’s best to have an expert take care of this for you. The accounting professionals at Back Office Support Solutions ae experienced in handling equity accounts and all other facets of closing out year-end books. Contact us today so we can help you through this process.
Review Year-End Financial Reports
Once you have gone through the basic checklist to close out your year-end accounting books, take the time to carefully review your year-end financial reports. This is what will be used to file your taxes and make projections for the new year, so you must ensure that it is absolutely correct and precise.
If even a single bit of this checklist overwhelms or confuses you, or if you’re stressed about being behind on closing your books at year-end, it is absolutely vital that you contact the experts at Back Office Support Solutions today. We can help you go over all aspects of your finances, close your year-end books, and help prepare your company for the new year. For all back office work that you need completed, contact the experienced professionals at Back Office Support Solutions right away at 619-363-3009.