Making a list and checking it twice!

Accounting, Business, Small Business, Financial Close, Month End, Year End planning 12/9/22

Check out our year end accounting checklist for small businesses!

This is the time of year where the snow is beautiful, decorations abound, and everyone is in a jolly mood… but, if you are a business

owner, your might feel like a Scrooge or a Grinch (take your pick) as it is also one of the most stressful times of the year! Between planning holiday parties, sending out client gifts, making the final push to reach all of your sales goals,and gathering all of the receipts and invoices you forgot to scan into your cloud storage account, there is hardly any time remaining to even begin to think about year end planning for accounting and tax purposes. If these are ringing any (jingle) bells for you, we have two great checklists for you! We’ve attended the trainings, read the articles, and compiled these two checklists for you to complete before year end to make sure you are prepared for 2023!

Here we go with Part One!

Accounting Checklist

o   Review all monthly accounting to make sure all invoices and receipts have been entered into your accounting system

  • Make sure you have sent out customer/client invoices for any sales performed during the year. If you want to defer receipt of the cash related to these into 2023, send these out on the last day of the year.

  • Pay all outstanding invoices to vendors before year end.

  • Update all notes payable for the principal and interest portion paid throughout the year.

  • Review all payments (especially on mortgages) to determine if there were additional items paid through escrow, like taxes and insurance.

o   Reconcile all bank accounts, credit card accounts or other financial accounts to be sure all of your information is complete.

o   If you have inventory, count all of the inventory as close to the last day of your year as possible. Make any adjustments within your inventory tracking system as needed.

o   Make sure all fixed asset purchases are recorded properly.

  • If you don’t already have one, consider implementing a capitalization policy to help determine whether purchases qualify as a fixed asset or an expense. A good rule of thumb is to capitalize anything over $2,500 (individually) with a useful life of more than 1 year. Be sure to talk to your tax preparer about this!

  • Scan in all related invoices to send to your tax preparer.

  • If you sold any fixed assets, make sure you have the key information handy! (Sales price, selling expenses, date of sale, name of the asset, original purchase price, past depreciation taken).

o   Review a list of the amounts paid to each vendor so you know who will need a 1099. If you have a service provider that was paid more than $600 during the year, there is a good chance they will need a 1099. Be sure to collect all W-9s for your vendors before year end!

o   Verify that all payroll has been completed before year end. If any bonuses will be paid, calculate them now to be paid before year end.

o   Verify all data has been entered into your accounting system and run the following reports:

  • Balance Sheet at Year end

  • Profit and Loss statement for the entire year

  • Comparative Profit and Loss statement

o   Make any final adjustments needed.

o   Close your fiscal period in your accounting system to protect the integrity of your data!

Take a deep breath and congratulate yourself on completing this tedious work! The hard part is over!

(But, stay tuned for our year end tax checklist!)



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