Accounting Tasks At Year End
Does 4th quarter sneak up on you? You’re not alone. Sometimes procrastination gets the best of even the most disciplined business owners and bookkeepers. It goes without saying, completing certain tasks BEFORE the end of the year can save you big headaches come January.
The following is a checklist of required tasks that can help get your books in order before tax time.
Preparation for 1099s ideally should occur well in advance of January. It’s important to have all the pertinent vendor information necessary by obtaining a completed W9 form prior to any payments being made. Work to ensure this procedure is in place. Once a vendor is paid, there is no guarantee of their cooperation in obtaining the information you require.
In addition, it’s also a good idea to review all vendor payments to date and get any and all entry errors corrected. Come January 1st you will have all your ducks in a row and your 1099 processing should go quickly and without a hitch. With all the necessary information in QuickBooks Online, processing 1099s is as easy as the click of your mouse.
A/R Clean Up
Accounts Receivable should be closely monitored and maintained throughout the year. When this doesn’t happen, it’s important to review before the end of the year to correct errors or make any needed adjustment entries. Depending on your level of involvement with the books, deposits may not be accurately received against invoices. It’s important to review A/R and make sure they’re clean for tax time. If there are outstanding payments due, you can work on collections or clearing any bad debt in accrual accounting situations.
A/P Clean Up
Accounts Payable is much like Accounts Receivable; it should be monitored and maintained closely all year. No matter the state of your books, it’s essential to attend to this. It’s important first, to make sure that the bills have indeed been paid! Once that is complete, then match up cleared checks with bills paid and make any journal entries to make A/P accurate.
Reconciliation is a vital way to ensure bank transactions are accurate and gives you the ability to help protect your business or client from fraudulent transactions. This step should be done regularly. When you have a bookkeeping debacle at the end of the year, this is the first step to clean up and should not wait until January. This gives you adequate time to address any issues and verify any expense and income transactions that are unfamiliar.
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An area that is often problematic is Assets. It’s very important to review the asset accounts and check for error entries to reclassify. You can also then earmark any entries that need further research or information.
We all know to reconcile checking, savings and credit cards. However, how often do you reconcile liabilities? It’s important that loan balances are accurate, and that interest and principle are recorded correctly. If you aren’t regularly taking care of reconciling loans and lines of credit, now is the time to pull statements and get them in balance.
It’s important for business owners to clearly see their financial situation at any given point during the year. Keeping the books reconciled and clean is the mark of a good bookkeeper. If the books are shared by a business owner and bookkeeper, sometimes things can get messy. It’s important to pull the P&L and Balance Sheet and review the numbers. Address any anomalies with your client or CPA.
4th Quarter is also a good time to do a review of the technology and applications you may or may not yet be using. Reviewing your workflow and software at this time can set you up to start the new year with improved processes and
efficiency. QuickBooks Online has a wide range of applications that can work to improve bookkeeping accuracy and efficiency, including tax processing, tracking mileage, sync employee time sheets and retain customer information.
Year-end is inevitable and tax time can be stressful and hectic. Help to make the season smooth and tax processing more pleasant by doing just a few simple, proactive tasks before year end.
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