Essential Year-end Bookkeeping tasks!
- Sherry Hergott
- Dec 8, 2023
- 2 min read
December is an important month for bookkeeping as it marks the end of the fiscal year for many businesses. Here are some essential tasks and considerations for bookkeeping in December:
Close the Books:
Ensure that all financial transactions for the year are recorded. Close the books to prevent any changes to prior periods.
Reconcile Accounts:
Reconcile bank statements, credit card statements, and other financial accounts. Address any discrepancies and ensure that all transactions are accounted for.
Inventory Check:
If your business deals with inventory, conduct a physical inventory count to reconcile it with the book value. Make any necessary adjustments to reflect the accurate inventory levels.
Review Outstanding Invoices:
Review and follow up on any outstanding customer invoices. Send reminders for payment and consider writing off any bad debts.
Vendor Payments:
Review outstanding bills and vendor invoices. Schedule payments for any outstanding bills to ensure they are accounted for in the current fiscal year.
Fixed Asset Review:
Review your fixed assets and determine if any need to be depreciated or if there are assets that need to be disposed of. Update the depreciation schedule accordingly.
Tax Planning:
Work with your tax professional to review your financials and plan for year-end tax strategies. This may include making necessary adjustments to optimize your tax position.
Employee Benefits:
Ensure that all employee benefits and contributions, such as retirement plan contributions, are accurately recorded and reported.
Budget Review:
Evaluate your actual financial performance against the budget for the year. Identify any significant variances and assess the reasons behind them.
Financial Statements:
Generate year-end financial statements, including the income statement, balance sheet, and cash flow statement. Review these statements for accuracy and completeness.
Prepare for Audits:
If your business is subject to an audit, whether internal or external, prepare the necessary documentation and reports. Be ready to provide any required information.
Tax Forms and Filings:
Prepare and distribute W-2s and 1099s to employees and contractors. Ensure that all required tax forms are filed with the appropriate tax authorities.
Evaluate Software and Systems:
Assess the performance of your bookkeeping software and systems. Consider upgrades or changes if needed.
Backup Data:
Perform a comprehensive backup of all financial data to ensure that you have a secure copy of your records at year-end.
Plan for the Next Year:
Set financial goals and budgets for the upcoming year. Consider any changes in your business operations that may impact your financial strategy.
Remember that it's crucial to consult with your accountant or financial advisor to ensure compliance with accounting standards and tax regulations specific to your business and jurisdiction.
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