Prepare Your Accounting System For Year-End
The Details:
Each year, the accounting system needs to be closed out in order to prepare accurate financial reports and for tax return preparation. A top reason for tax return late filings is not having all the information to complete the return. Following the steps below will help you with being prepared with tax time and will start you on a good path for the new year. If you are having a professional prepare your tax return (which I highly recommend) it can also save you money. Most preparers charge extra if the accounting system isn’t in order and closed out.
Prep Work:
•Make sure all income and expense transactions are in your accounting system.
•Review all transactions for accuracy, including coding. Make any necessary changes.
•Use bank statements to reconcile all bank and credit card accounts.
•Review the P&L and Balance Sheet. Reviewing at this level sometimes discovers errors that weren’t caught prior.
PRO TIP:
√Review the P&L by month. Seeing each month side by side and at the category level is the best way to find inconsistencies and errors. (For video tutorial on how to customize the P&L view see this article.)
√Perform the prep work each month during the year. This prevents scrambling at year-end and allows you to review current and accurate financial reports throughout the year.
If you aren’t sure how to go about doing any of the above, you might be ready for a 1 on 1 QBO training session or a QBO system review. Details can be found on the services page.
The article is for informational purposes only and should not be construed as business, accounting, tax, or legal advice. Details are subject to change without notice.
Copyright © 2018-2020, Brandon & Christi Rains, Rains Group LLC DBA The Sensible Business Owner, ALL RIGHTS RESERVED
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