Bookkeeping Year End Checklist

January 7, 2013 by Ed Becker

The year has come and gone and now is time to get information to your CPA for tax return purposes.  In reality, a small business should be performing all of its essential accounting functions during the year and on a day-to-day basis.

Let’s face the facts:  small business owners get sucked into daily fires and it’s often the case that their accounting gets pushed to the side. Unless you have a bookkeeper or use the services of a professional outsourced accounting firm such as Outsource Your Books LLC (OSYB LLC), it’s not unusual to be behind and stressed out about it.

OSYB performs a variety of functions for its clients during the year, and a complete review is done at year end so that our clients data files are ready for tax time.

Suggested Year End Procedures:

This is just a sample.  Depending on your industry, complexity of business, software used and many other variables, the list can be much more complex.

1. Reconcile bank and credit card accounts. Paypal is considered a bank account and is sometimes neglected in this process.
2. Reconcile all loans and lines of credit, and verify that principal and year-to-date interest is accurate.
3. Update fixed asset records and record deprecation
4. Amortize intangible assets
5. Ensure that all subsystems for Accounts Payable and Accounts Receivable tie to your general ledger balances
6. Tie out all wages, payroll taxes to W-3’s and quarterly payroll returns
7. Prepare and issue 1099’s to recipients by January 31st.  For more on this visit our prior blog post “Get Ready For Year End-1099 Time”
8. Are all prepaid expense accounts adjusted?
9. Have necessary accruals been recorded for accrual basis taxpayers?
10. Reconcile petty cash account
11. Clean up all A/R and A/P accounts to ensure that credits and/or overpayments are correct
12. Review all posting for the year to determine if there are any items that need to be reclassified
13. Obtain documentation for all charitable donations made throughout the year
14. Close out any Distribution accounts
15. Make a complete back up of your data file. Most clients should be doing this daily, but I have seen cases where months of data needed to be re-created due to lack of backups.
16. Condense and archive your QuickBook’s file.  This can help with performance on your file
17. Review and determine if any checks need to be voided and reissued before you finalize your December 31st bank reconciliation
18. Write off any bad debts

If you are in bad shape, now is not the time to panic. Now is the time to bring in a professional who can do this for you and provide you with the peace of mind you need. Focus on growing your business and leave accounting to the experts.

For a free year end check up, feel free to contact us.