Business Bookkeeping Year-End Checklist: Get Your Finances in Order

Are you getting ready to wrap up your business bookkeeping for the year? If not, now is the time! You need to do a few things to get your finances in order. In this blog post, we will discuss the steps you need to take to ensure your books are in good shape. By following this checklist, you can relax and enjoy the holidays knowing that your business finances are taken care of!

Balance Sheet Reconciliation

It’s a process in which you compare the amounts reported on your Balance Sheet to outside sources such as bank statements, loan documents, and customer accounts. This ensures that all assets and liabilities are accurately accounted for, and any discrepancies are identified and corrected.

Reconcile Cash Accounts

You should reconcile your bank accounts, including any credit cards and petty cash. This will ensure that everything is up-to-date and accurate. When you reconcile your accounts, you match the balances reported on your books with bank and credit card statements. This ensures that all your expenses, income, assets, and liabilities are accurately recorded and provide an accurate overview of your financial performance.

Inventory

Perform a physical inventory count and reconcile it with the balances in your bookkeeping system. Ensure you correctly identified and accounted for all the products in your inventory.

Payroll tax liabilities

Comparing your payroll liabilities to actual year-end balances is one of the crucial tasks to complete as you wrap up your bookkeeping for the year. This will ensure that all of your employee wages and withholdings are accounted for and that there are no discrepancies.

Ensure that your payroll liabilities align with your actual year-end balances.

Review Accounts Receivable and Payable Aging Reports

Review your accounts receivable to ensure that all due invoices have been paid. Also, review the accounts payable to ensure that all expenses are up-to-date. This step can help you identify any unpaid bills or late payments so that you can stay on top of them before the new year.

You might want to write off any uncollectible balances on the Accounts Receivable aging report.

Business Loans

It’s important to know exactly how much debt you have and what type of loans you have taken out for your business. Reviewing this information can help you plan for the future and ensure that all payments are up-to-date.

Fixed Assets

Perform a physical inventory of all fixed assets and reconcile it with your bookkeeping records. Ensure all assets are accounted for and correctly entered in your books.

Profit & Loss Statement

The Profit & Loss Statement is one of the most important financial documents of your year-end bookkeeping. It determines your business income and expenses and your annual net profit or loss. A professional accountant should prepare this statement so that it is accurate and provides the true picture of your company’s financial performance.

Revenue

As you wrap up your bookkeeping for the year, one crucial task is reconciling your revenue to actual year-end balances to the point-of-sale system (POS) and billings. This will ensure that all of your income is accounted for and that there are no discrepancies.

Review Annual Expenses

Take some time to review your annual expenses and look for ways to cut costs next year. This could mean reviewing vendor contracts, looking for cheaper alternatives, or canceling unused services or subscriptions. 

Payroll Expenses

You must compare the totals to confirm that your payroll expenses reconcile with the year-end payroll journals and tax returns. The totals should match; otherwise, a discrepancy may need to be corrected.

Owner’s expenses

Enter in the books the expenses the owner paid personally, including mileage, cell phone, home, etc. Review the expenses from the previous year and make any adjustments as necessary.

Taxes

The year-end is also a good time to review your company’s tax records. Make sure that all necessary records are up-to-date, accurate, and complete. This is a crucial step to staying compliant with the law and keeping your business on the right track.

Conclusion

It’s essential to stay on top of your bookkeeping records throughout the entire year. These are steps you need to take when wrapping up your bookkeeping for the year. Following this year-end business bookkeeping checklist ensures that everything is up-to-date, accurate, and ready for the tax season.

Contact us if you have any questions or need help getting started with your business bookkeeping. We can help you identify any areas of concern and make sure that all of your financial records are accurate and organized.