Accounting Checklist For Year-End: How To Close Your Books?
Every business owner has a busy time at the end of the year. You might be monitoring and juggling accounting procedures to ensure a seamless financial transition for your firm. For your firm to close the year more effectively, you should establish a year-end accounting checklist in the same way that you do for tasks you wish to do in your daily life. During this time, planning and adhering to a predetermined workflow is one of the simplest ways to lower stress and increase productivity.
Year-End Checklist is Important, Here’s Why?
Your main goal as a business owner should be to streamline accounting procedures and make them more effective going forward. Making a checklist that will assist you in streamlining your workflows is one of the most crucial strategies to accomplish this. This will offer you a good start in making the end of the year successful.
What makes Year-End Accounting Difficult?
There are several obstacles to overcome in planning for the conclusion of the fiscal year. When it comes to easing their hefty responsibilities during end-of-year closing, accountants are frequently at the mercy of others.
- Errors are inevitable when complicated documents are processed by people in large quantities. Nevertheless, even a minor error in an entry or a lost document might have expensive repercussions.
- Entering data by hand into spreadsheets is time-consuming and prone to error, but also one of the most common methods of accounting.
- Accountants regularly have to go after employees to get missing paperwork or justifications for particular transactions. This frequently leads to fruitless and perplexing email threads.
Analyse Your Financial Statements
Financial statements make comprehending your company's financial position easier and, hopefully, less stressful for your firm during tax season. Your accounting books contain your financial records, which you can access. Prepare these financial statements to have everything in place:
- Income Statement
- Cash Flow Statement
- Balance Sheet
Have This Checklist Sorted for Hassle-free Year-End Accounting!
Clear Your Invoices
Before the start of the new year, you must recover the money from the customers. By doing this, you'll make sure your company has adequate space and can submit solid financial results.
You can also send a polite reminder to all of the clients who haven't paid the outstanding invoices.
Inventory Accounting
If your company keeps inventory, perform an inventory check before the end of the year. You can determine how much you spent on inventory during the year and its value by accounting for it at year's end. Also, it can aid with inventory planning for the following year, particularly during busier seasons.
Reconciling Bank Accounts
Reconciling your bank accounts and credit cards should be a top priority on your accounting year-end operations checklist. By doing so, you can make sure that your bank accounts and accounting records are accurate. Compare your bank and credit card statements to your accounting records in order to reconcile your finances.
Backing Up Data
Add backing-up information to your year-end closure checklist to make sure you safely save your accounting data for the coming year. Losing crucial accounting data from this year and earlier years is the last thing you want to happen. Get a dependable backup solution in place to safeguard the security of your data.
Having all the Necessary Documents in Place, Organised!
To make sure you safely preserve your accounting information for the next you should prepare documentation for your accountant before year-end if your company uses an accountant in any way, such as accounting software in collaboration with a tax professional.
Make sure you are organised from the beginning if you want to maintain your receipts in good form all year. File or save it according to your file management at every step.
