Keeping your financial records in order is highly important to the success of a company. As the end of the calendar year approaches, accounting and finance departments start to work diligently to close out their books so that they can prepare to file tax returns and become audit-ready. To avoid missing any steps and to ensure a smooth transition into the new year, we have prepared this year-end accounting checklist.
Document Accounting Transactions
Document all entries in the accounting system and make year-end adjustments to account for accruals and deferrals.
Review Payroll Activities
Confirm that all forms and payments have been made to get W2 forms out on time to employees. Take into account any accrued bonuses or other gifts that may not be paid until the next year.
Close Out Any Outstanding Receivables
Make the effort to collect on unpaid bills in order to close out all outstanding receivables and improve control over your cashflow.
Create a Budget
Start planning an annual budget by reviewing the current year’s financial statements. These will give insight into expenditures from the current year and will drive the financial forecast and budget for the next year.
Become Audit Ready
If your financials are not GAAP compliant, then now is the time to start moving in that direction. If seeking funding or selling a business is in the near horizon, investors will require accurate financials. Working to become compliant also means, you can become audit ready.
Assess Internal Controls
Review your internal processes and controls to make sure that they are working. Look for gaps in the process that allow the potential for fraud or errors to run high.
Evaluate Process Improvements
If manual data entry is slowing down the process of producing accurate financial statements on time or impeding staff performance, consider using automation to improve the accounting process. Demo any desired software and budget for it's potential implementation in the incoming year.
These are just a few of the “must do’s” to ensure a smooth transition to the start of the new year. If you find that you are lacking the resources to get these tasks accomplished, contact our team to discuss finding you the right talent for your immediate needs.