Year End 2012 Accounting Check List

by Lynnea Bylund on November 1, 2012 · 13 comments

Soon it will be that time of year once again when most companies are closing their books. The company owners will either be partying or nursing their wounds. In any case, we as small business operators usually have some checking and tidying and decision making to do.

Thanks goes to Universal Accounting School for this list –

Year-End Financial Statements

Year end bookkeeping accounting quickbooksThe year-end financial statements are the most critical reports we issue. These reports (profit and loss statement and the balance sheet) will be used for tax preparation, for 2013 budgeting and for decision making more than any other monthly reports we prepare.

Because it’s important that these year-end financial statements reflect accurate information, we need to make sure they are correct.

You probably have a year-end routine you rely on, but here is a simple checklist of items that you might consider for clients when ensuring the accuracy of their year-end financials:

Year-End Accounting Checklist

    • Does the general ledger bank balance reconcile to the bank statement?
    • Are there any worthless accounts receivables that should be written off?
    • Does the Allowance for Bad Debts have a reasonable estimate of potential write-offs?
    • Is Deposits is Transit cleared out?
    • Have all the credit card accounts been reconciled as of year-end?
    • Does the company’s inventory balance reflect actual inventory available?
    • Do you need to adjust inventory for items that cost more than their worth and should be written down to their market value?
    • Does the company still have all the fixed assets?
    • Have you recorded depreciation correctly?
    • Does the suspense account have a zero balance?
    • Any prepaid items that need to be expensed (i.e. prepaid insurance)?
    • Have all year end payables been accurately recorded?
    • Does your payroll tax liability coincide with year-end reports?
    • Does the notes payable account (loans) agree with the bank?
    • Does the interest expense for these notes agree to form 1098 from the financial institution? (you no longer need to wait for the 1098’s with the convenience of on-line banking)
    • Are there other debts that have not been included on the books?
    • Are there debts on the books that no longer exist because of forgiveness or nonpayment?
    • Are the 1099 vendor’s correct information, federal identification number, and mailing address?
    • Have I ordered or do I need to order year-end tax forms (i.e. 1099’s, w-2’s, etc).

Meet with your Advisor

Once you have completed this list, make sure you sit down with your Advisor and review the financial statements to identify anything you might not be aware of.

Throughout the review ask the question, “Do these balances seem reasonable?” At the end of the meeting ask, “Are there any other assets or liabilities that I haven’t included?”

Finally, the last step of the year-end process is to compare your financial statements to prior years to see if any increase or decrease is reasonable. If you run across some significant changes, you may want to look at the general ledger account to ensure the entries are legitimate or if they need to be reclassified.

As you follow this year-end process you will be amazed at how much you learn. You may see trends and practices that will help you run your business more effectively.

In fact, often times the accountant will know more about the business finances than the owner. So, this year, take the time and make the effort to be precise so that you can go into 2013 with reliable balances and peace of mind.

{ 13 comments }

1 Jane Emposte November 23, 2010 at 6:37 am

I’ve recently started a blog, the information you provide on this site has helped me tremendously.

2 Stacey Bingham December 9, 2010 at 4:51 am

This is a good list of things to do at the end of this year. People often need help when crunch time comes. Who do you know who talks to so many different people; to get so many different things done; crunch time for bookkeeping, finding the biggest values and the lowest costs,in the shortest amount of time? It could be your very own admin. Try looking into having your very own admin.

3 Catalyst QuickBooks Editor February 19, 2011 at 5:50 am

Thank you Stacey, for chiming in on our blog. Your virtual assistance service is a much needed augmentation for many small companies.

4 James Z Despain December 28, 2010 at 8:26 am

Thanks for the great post. Several good points on proper year-end management.

5 VarUmamma February 3, 2011 at 6:26 pm

As always, great small business bookkeeping advice.

6 Catalyst QuickBooks Editor February 19, 2011 at 5:51 am

We try. 🙂

7 JoeyBear February 6, 2011 at 7:38 pm

Great blog, i love it. I wish I had your year-end bookkeeping tips in November!! Well there is always next year! LOL

8 Waterson Mac February 9, 2011 at 12:41 am

This is by far the simple year-end accounting check off I have read.

9 Andrew A. Sailer March 9, 2011 at 12:31 pm

Good post! Great list for tax year-end!

10 SimpleDave April 1, 2011 at 10:47 pm

Nice one, thanks for the post.

11 Ashlee Brimmage April 5, 2011 at 10:39 pm

Nice blog post. Keep up the good work. Is there life after small business?

12 Adolph Bachar April 7, 2011 at 9:27 pm

I thought I should let you know you have a great website.

13 Cassidy Gurtner April 28, 2011 at 2:24 pm

I’m no expert, but thanks for interesting blogpost

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