Navigating year-end bookkeeping for your business doesn't have to be overwhelming. Fear not! We've curated a user-friendly checklist that not only simplifies the process but ensures your books are meticulously prepared for year-end submission. Delight your accountant with our organized and thorough approach.
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Record All Transactions
The first crucial step is recording all transactions for the year, including unpaid bills and invoices. To complete this task you will need to start by gathering all of your bank statements for each company account. This includes all your chequing, savings, and credit card statements registered in the companies name.
Automate Your Bookkeeping
For incorporated businesses seeking a simplified and automated bookkeeping approach we recommend using bookkeeping software such as QuickBooks Online makes completing bank recs much easier. If you’re not sure how, check out these bank reconciliation tutorials for QuickBooks Online.
Advantages of QuickBooks Online:
Bank reconciliations are much easier because all transactions are automatically entered as seen on the bank statements,
Updated financial reports with only the click of a button, and
Seamless payroll filings and calculations.
Review Your Financial Statements
Once you have completed your bookkeeping, it’s a good idea to look through your income statement and balance sheet and make sure things appear correct. Go through each line item and look for dollar amounts that don’t seem to make sense. You may quickly find a few mistakes that you can correct before sending your books to your accountant. Look for things like:
Negative account balances
Account balances that seem too high or too low
Large differences in account balances from the previous year
Check Your Accounts Receivable and Invoices
Ensure a robust cash flow for your small business by regularly reviewing receivables. Utilize your bookkeeping software to run an aged receivables report at year-end, focusing on the oldest invoices where errors often hide. Assess outstanding invoices, promptly addressing discrepancies and contacting late-paying customers for resolution.
This proactive approach not only ensures timely payments but also enhances the overall financial health of your business. Boost your cash flow and set the stage for small business success with efficient receivables management.
Check Your Accounts Payable
In addition to managing receivables, ensuring the accuracy of your accounts payable is crucial for a seamless year-end financial assessment. Utilize your bookkeeping software to run an aged payables report, carefully reviewing each item for coherence. Take proactive steps by settling any overdue bills and recording any missing bills dated on or before your year-end.
This meticulous approach not only guarantees accurate financial records but also contributes to potential tax savings by capturing all relevant expenses. Stay on top of your accounts payable for a financially sound year-end.
Perform an Inventory Count
For businesses with inventory, it's crucial to accurately assess the value of stock at year-end. Take proactive measures by physically counting your inventory on or around the final day of your fiscal year. Whether it's widgets, bottles of vinegar, or car batteries, document the quantity and calculate the total inventory value by applying your cost per unit.
This hands-on approach ensures precise financial reporting and sets the stage for strategic decision-making in the upcoming fiscal year. Don't overlook the importance of thorough inventory management for a successful year-end assessment.
Take Time to Reflect
The year end is a great opportunity to reflect on your business on a higher level. Is it providing the income, time and enjoyment that you had hoped it would? Or is it stressful and all-consuming? What goals did you have for your business at the start of the year and did you achieve them?
Looking at the bigger picture will help you make decisions to improve how your business operates, how you work in your business, and ultimately, your life as a business owner.
Send Info to Your Accountant
The last step is to send the info off to your accountant. Don't worry too much if you're not sure what exactly to send, your accountant will follow up with additional info requests.
We typically ask for the following information. Start here and your accountant should be quite happy!
Bank Statements - Bank and credit card statements for the year-end month and the following month in pdf format.
Trial Balance - The Trial Balance as at the year-end date.
General Ledger - The General Ledger for the fiscal year. When creating this report in accounting software, you will need to enter the first and last days of the fiscal year as the time period.
Accounts Receivable - The Accounts Receivable Aging Report (or just a list of receivables) as at the year-end date.
Accounts Payable - The Accounts Payable Aging Report (or just a list of receivables) as at the year-end date.
Supporting Documents - Include supporting documents for any applicable balance sheet account items. For example, an inventory count and cost calculation to support the inventory balance on hand at the year-end.
Capital Asset Purchase Details - For any large capital asset purchases, it's best to include the supporting document or at least a description of what was purchased.
Share Capital Info - Include share capital details if it's the first year of filing with your accountant or if any changes to the share capital.
Confirm That You've Closed the Books - It's best to confirm that you have closed and locked your books for the year. If you make changes after your accountant has started on the year-end with the info that you provided, it will significantly increase the accounting work. If your accountant charges you hourly, this means your bill will be higher too.
This should really help your accountant get to work on your year-end. It will mean a faster turn-around for you and likely a smaller bill if your accountant bills hourly.
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