Year-End Bookkeeping Checklist

Can you believe the end of the year is quickly approaching? To help get your books in order and ready to send to your tax preparer here is a year-end bookkeeping checklist to help keep you organized. Keep in mind that every business is different. This list is meant to provide you with a general idea of items to take care of before December 31, 2017. When in doubt or if you have questions, seek guidance from a professional who knows your specific business situation.

End of Year Bookkeeping Checklist:

  • Get Organized: Find all the receipts for any deduction you are claiming on your tax return. Keep in mind that no receipt equals no deduction.  After collecting all receipts, look over your personal bank statements for any business charges you paid for out of your personal account. Do the same with your business bank statement, but this time look for any personal expenses paid out of your business account. Make a list of these transactions to give to your tax preparer.
  • Reconcile Your Bank Account(s): Bank Reconciliations are a great tool to verify all transactions have been posted into your accounting software. This ensures your general ledger bank balance (the bank balance in QuickBooks) matches your bank statement. If not, fix any mistakes you discover in the process.
  • Invoices: Have you invoiced all of your customers for work you’ve done and products you’ve delivered/shipped for the year? If not, get caught up on those invoices.
  • Collections: Follow up with any customers who owe you money. Send them a past due statement and/or give them a call to remind them they owe you money. Now’s a great time to collect your receivables. Look through your accounts receivables. Are there any receivables that you are unable to collect that need to be written off your books or sent to a collection agency?
  • Inventory: Verify your inventory balance is correctly reported on your balance sheet. The best way to do this is to have an accurate count as of December 31st. You’ll also want to verify that your inventory is valued correctly – determine if any inventory items cost more than they’re worth and need to be written down. Remember, your tax preparer is going to need the following to prepare your tax return: 1. Inventory balance at the beginning of the year (January 1st); 2. The cost of inventory purchased throughout the year; 3. The amount of inventory that was sold during the year; 4. The ending inventory balance as of December 31st.
  • Fixed Assets: These are the larger purchases you made throughout the year (i.e. equipment, automobiles, furniture, computers, etc.). Do you still have all the fixed assets that are reported on your balance sheet? If not, record the sale or disposal of these fixed assets. Don’t forget to verify the depreciation on your fixed assets as well (if you don’t know how to do this, contact your CPA. They will be able to generate a depreciation schedule for you). Make any necessary adjustments.
  • Expenses and Accounts Payable: Verify all of your accounts payables have been recorded in your accounting software, such as QuickBooks. Now’s a great time to make your 401(k), SEP IRA, and Simple IRA contributions, if you have not done so already.
  • Notes Payable: Verify your notes payable (i.e. loans) amounts on your balance sheet match the statements from your banks. Are you missing any notes payables? Do you have any notes payables that you paid off during the year or debts that were forgiven? Make any necessary adjustments. Not sure how to make the adjustments? No worries, make a list to give to your tax provider or contact a CPA to help you make the necessary adjustments.
  • Mileage: Great news, you can deduct $0.535 per mile for business miles driven in 2017. That means any trips to clients or for meetings are deductible. There are a few apps out there that can track your mileage for you. Please note that your daily commute does not qualify for the deduction.
  • Collect W-9’s: If you have not collected W-9’s from your vendors and/or contractors you paid $600 or more to throughout the calendar year, now’s a good time to collect those. Don’t forget your 1099’s are due on January 31st.
  • Payroll Taxes: Verify your payroll tax liabilities match your quarterly payroll returns.
  • Double Check your Profit & Loss: After making all of the adjustments listed above, double check your P&L Statement. Make any necessary adjustments. Remember, no receipt equals no deduction.
  • Create a Budget for Next Year
  • Back up your accounting software file to protect you from loss of data.

 

Juanita is the owner of Elite Financial Management, an Atlanta, GA based accounting firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Juanita loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found reading, cooking, and hanging out with her family.

 

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