Year-End Closeout Accounting: 10 Things You Should be Doing

If you own a business, then you know there are a lot of things to do to close out the year on a strong note.  On the year-end closeout accounting side of the house here are 10 things you should be focused as you move into the fourth quarter:

1. Review and collect your accounts receivable (A/R)
2. Find last year’s tax return
3. Organize all your bank, credit card, loan documents
4. Sort your business receipts for year
5. Bring your books current
6. Discuss end of year tax planning with tax accountant
7. Prepare your budget for next year
8. Locate all your payroll reports
9. Run vendor reports
10. File your PPP forgiveness application

Review and collect your accounts receivable (A/R)

To improve your cash flow focus on collecting the last step in your revenue cycle. If you’re unhappy with the results of your gross sales the best way to quickly improve it in your year-end closeout accounting is to collect whatever outstanding receivables you have by the end of the year.

However, if you worry about paying more taxes then holding off on this strategy is probably in your best interest. If you’re not sure then the next action will help you make a decision when collecting accounts receivable.

Find Last Year’s Tax Return

You want your books to be as up to date as possible when preparing for your taxes this year. Therefore, we recommend that you make sure your accounting records tie out to last year’s tax return. A good bookkeeping service would do this once your taxes are complete, but it’s always a good idea to check to make sure but the proper journal entries have been made in your accounting system.

Organize all your bank, credit card, loan documents

Next step in getting your books in order is to reconcile all of your bank accounts credit cards in loan documents so that they reflect current balance is in your accounting system. If you’re using monthly bookkeeping services, this work should have already been done for you. It’s always a good idea to go back and make sure everything is good before having an end of year planning meeting with you or tax accountant.

Year-end closeout accounting means sorting your business receipts

Many of us tend to just toss are receipts wherever. Over the course of 12 months this can create a real paper nightmare. It’s a good idea before turning your records over to your bookkeeper to sort through them and make sure they are complete.

We recommend scanning these documents Anne associating them with the correct transactions in your accounting system. This allows you to get rid of the paper in keep all records needed should they be required at some time in the future.

Bring your books current for year-end closeout accounting

With the previous 3 steps completed, now you can begin to bring your bookkeeping current in your accounting system. First make general Journal entries to ensure that your financial records match your balances on last year’s tax return. Next, reconcile your bank accounts credit cards and loan documents to make sure that they reflect current balances. finally, complete any transactions 4 expenses that may not already be recorded to bring your accounting system up to date.

Discuss end of year tax planning with tax accountant

Now that you know your accounting is current, schedule a time to sit down with your tax accountant and review your current position. The purpose of this meeting is to discuss any tax strategies that can help you to minimize the current years taxes when filing with the IRS. It’s a good idea to do this sooner rather than later in the third quarter so that you have time to make any course corrections that may be needed.

Year-end closeout accounting then prepare your budget for next year

It’s always a good idea to have a plan as you move into the following year, a budget is your financial plan for the coming year. We always recommend a budget as a tool for business growth. It gives you a mechanism to measure the financial performance of your business as you move forward. So, as you complete year-end closeout accounting begin looking forward to next year.

Locate all your payroll reports

Completing your W-2 for employees can be a big job, especially if you don’t stay on top of your payroll reports. For almost every business labor is the greatest single expense. Accounting for payroll is critical whether you are doing it yourself or using an outside accounting processing service.  If you hate handling payroll contact BGS bookkeeping as we have many solutions that can help you with this difficult in often unpleasant business necessity.

Run vendor reports

Closely related to your payroll or your 1099 for vendors. Just like your payroll, staying on top of your vendor is critical.  Click this IRS link to find out what you should be keeping on file for your vendors.

You can get a vendor report with a click of a button, if your accounting system was set up properly from the start.  Not sure how to correctly setup in manage vendors in your accounting system, then contact BGS bookkeeping, We can help you quickly get setup up correctly.

File your PPP forgiveness application

This year there is one additional in the year action required. If you received payroll protection program funds then you’ll need to make sure you file for forgiveness should you want that loan to be forgiven.  Accounting for those funds as they were spent is critical to making this process as painless as possible. If you need assistance in getting your PPP forgiveness application filed contact BGS bookkeeping, we can help.

Is Your Year-End Closeout Accounting Complete?

How many of these items have you already addressed? Do you have questions on any of these or other accounting and bookkeeping issue which you may be wresting? Just click the button below and signup for a FREE 30-minute consult to discuss your specific questions.