Key Accounting Tips for Preparing Books for Year End

With your corporate year end approaching, it is vitally important to ensure your books are in proper condition to hand over to your accountant. If you haven’t been keeping your books updated throughout the year, then read on for key accounting tips for preparing books for your year-end. 

Check Your Accounts Payable 

Check your aged payables. Your accountant will run an aged payables report through a bookkeeping software, but do your due diligence in ensuring that your accounts payable are correct. Late bills should be paid; if there are bills missing dated on or before year-end, they need to be recorded. 

Do an Inventory Count 

For businesses with inventory, having a clear grasp of the on-hand inventory's value by year-end is necessary. On the last day of the fiscal year, conduct a physical count of the inventory. The value is generally measured at cost per unit. 

Look Into Invoices and Accounts Receivable  

Receivables need to be reviewed on a regular basis in order to keep track of payments. Bookkeeping software can create a report of aged receivables at the year-end date. Any outstanding invoices should be counter-checked as to whether or not they’ve been paid off.  

Missing invoices should be taken note of. Late payments should be addressed through a phone call, e-mail, or some other type of communication to customers. 

Make Sure All Transactions Are Recorded 

Having every single piece of relevant data on hand is non-negotiable. While it may seem like a given, it's the most important reminder of all. Some people leave out their unpaid current year invoices and bills. This is a mistake: those are part of the transactions that must be recorded too.   

Keep track of invoices, receipts, and bills and constantly cross-check with the records. 

Get Bank Reconciliations Done 

It's one thing to use bookkeeping software to record all transactions. It's another thing to ensure that it reads the same on your credit card statements as well as bank statements. Bank reconciliations will solve this situation with little to no problem. QuickBooks Online, Xero, or similar bookkeeping software will get this done conveniently.  

Double-Check Financial Statements 

Post-bookkeeping, the balance sheet and income statements need to be perused in full. Every single line item has to be inspected, and any confusing or odd dollar amounts should be noted. It's a great way to pick up possible errors that can be fixed prior to the accountants receiving the books. 

It's important to note account balances that are either too low to too high, negative account balances, and wide discrepancies between the current and previous year account balances. 

Conclusion 

While the end of the year brings on excitement for what’s brewing in the next year, it’s important for your books to be prepared properly before they're turned over to accountants. Be sure to check on accounts payable, get bank reconciliation done, and do an inventory count.    

If you don’t have an accountant yet, work with Blueprint Accounting. We offer accounting and bookkeeping services, including small business bookkeeping, corporate tax services, and accounting. Reach out to us today!