The end of the year is fast approaching, and with it comes the closing of your books for the year. Some useful things to keep in mind are listed below:
- Close your revenue and expense accounts to retained earnings. You will want these accounts to start out the new year with a zero balance.
- Inventory should be counted for year end count totals. Adjust the counts accordingly. This will help you start fresh in the new year with accurate counts.
- Reconcile your accounts payable account. All accounts payable checks written by the end of the year should also be dated the same date in your accounting records.
- Reconcile your accounts receivable account. All accounts receivable received by year end should also be included in the year end totals.
- All payroll for the year should reflect hours worked through December (not January).
- Try not to purchase inventory or supplies too close to year end. This can make things more confusing.
- Once everything is in, run your financial statements (balance sheet, income statement, trial balance) to check for any underreporting or recording into the wrong accounts. When these look ok, it is time to turn things over to your CPA or tax accountant.