Checklist for Deep-Cleaning Your Year-End Accounting

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• Before we jump into this accounting project, you should get to know your opening equity account.
• Be sure to record any interest paid on lines of credit as an expense, and keep an eye out for especially unusual activity, such as negative balances.
• They can also review details from prior years to ensure that your retained earnings are correct.
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• But continuing this practice can create a quagmire of entangled personal and business expenses that can weaken the separation between your finances and the finances of your business.

The heart of the bookkeeping process is to ensure your clients’ financial records are complete and accurate. Regularly reconciling your clients’ accounts ensures this is true. When you’re doing that full cleanup, what do you clean up? That means being able to present the tax preparer with books that are cleaned up and that need very few adjustments. Another goal when cleaning up the books is to have financials that are meaningful and accurate.

Our Process

Clean up your company’s books in one simple, coherent checklist by Acuity. We offer daily and weekly services to our bookkeeping clients. Weekly services are included in our most popular bookkeeping packages.

You can use this bookkeeping cleanup checklist to help you stay on track. The good news is the more consistently you do this, the less time it will take. If your greatest discovery during this process is that you don’t have the time, energy, or knowledge to do this on your own, it’s time to outsource your bookkeeping. A big part of the accounting process is to check your outstanding accounts payable and accounts receivable for small business reports. These reports may be incorrect if you haven’t accurately recorded a collection, payment, sale, or expense. In the end, it will lead to missing income or expenses in your books.

Best TaxDome Alternatives for Productive Firms

You might opt out of paper statements entirely, using online methods of paying bills and moving around money. Some online systems can even be integrated with accounting systems like QuickBooks. If you use a cloud-based service, you may be able to share information easily and safely with partners. https://dodbuzz.com/running-law-firm-bookkeeping/ If your company has inventory, you will need to account for it in your general ledger. Frequently, companies will perform a physical check of inventory and compare it to accounting records. There could have been inventory stolen or sales may not have been recorded in the ledger properly.

QuickBooks makes it easy to record a customer payment… but you can do this even if you never create the invoice the customer payment pays. QuickBooks makes it pretty easy (too easy in some ways) to only enter half-the-story transactions. You’ll find out where to start, what order to work in, and get my tips on other common cleanup 'must-knows’. The client has come to you for help because they’ve either crashed and burned doing their books DIY or have been working with a bookkeeper who did everything wrong. It’s become like quicksand, getting worse the harder they struggle to get out. Our bookkeeping clean up service fees are very reasonable, making it an affordable solution for businesses of all sizes.

Filed a business tax extension? Sign up for our spring clean up.

Check your bank statements against your accounting records to catch any mistakes, ensuring that all transactions have been recorded properly. Let’s define what I’m talking about just to make sure that we’re all on the same page. Once you’ve done the bedrock work of reconciling your cash accounts, you can move on to other issues affecting your books. None will be as important as verifying your cash flow against source documents, but each of them contributes to an accurate picture of your business and its true value.

For spick and span books, you might consider upgrading your tried-and-true spreadsheet or paper records to software. You must check your inventory records if you sell products to ensure that all purchases and sales have been appropriately documented. By reviewing your inventory records, you can ensure you’re not stocking up on unnecessary items and that your prices are reasonable. The payments you make to your employees, such as salaries, wages, and deductions, are documented in your payroll records. By checking your payroll records, you can ensure that all payments and deductions have been appropriately documented and that you comply with all tax requirements. Deposits, withdrawals, and any fees or charges are all included in this.