It’s officially the first week of December! It’s the most wonderful time of the year...Until you realize it’s time for your year-end close.
But don't panic! Here are eight tasks to ensure your books are closed accurately and on time. As you complete them, cross them off the list! Trust us, it feels really good.
1. Verify all current invoices are sent to customers and amounts due are being collected.
Making sure all your receivables are recorded and cash due is collected is one of the most crucial components of finishing up your company's fiscal year and reporting a strong balance sheet. If you have any unbilled invoices, send them as soon as possible. If there are aged invoices, start reaching out to customers.
2. Ensure all closed customer contracts are recorded so that you recognize all revenue. Did you close a deal on December 31st? Record it! If you have fulfilled any of your performance obligations you may be able to record some revenue for the current year.
3. Enter all invoices received from vendors into your accounts payable system.
Accurately reporting all expenses and liabilities is crucial in maintaining compliance with accounting standards and appropriately matching revenues and expenses. It will also help you maintain accuracy in your current and subsequent year budgets.
4. Accrue for invoices not yet received from vendors
Sometimes vendors don’t send you their invoices timely. Not a terrible thing for your cash flows, but you do still have to record a liability and expense in your financial statements.
5. Categorize and record all business expenses
All expenses should be categorized and properly recorded to identify the tax deductions, track budget versus actuals, analyze your spend, and overall produce more accurate financial statements.
6. Verify employee and independent contractor information is accurate.
Contact and tax information must be correct in order to send out W-2s and 1099s by required deadlines.
7. Reconcile all transactions between your general ledger and supporting documents
Ensure that recorded transactions match evidence from credit card statements, bank statements, invoices, receipts, contracts, and other supporting documentation.
8. Run your financial statements and review for any required adjustments.
Your income statement and balance sheet will provide you with a picture of your company's financial status at the end of the year. Make sure you thoroughly review them and determine if any adjustments need to be made to present an accurate financial picture.
Are you ready for your year-end close? Good luck to all the accounting and finance teams. We feel your pain. Need help in closing your books? At VCG we have experts who have the knowledge, skills, and experience that can contribute to the success of your business.
BOOK A FREE 30-MINUTE CONSULTATION WITH OUR EXPERTS!