Year-end accounting helps you organize finances, which helps you adhere to Generally Accepted Accounting Principles (GAAP) and prepare for potential audits. Having real-time access also helps ensure quicker reviews, approvals, and sign-offs, reducing bottlenecks in the process. Outstanding expense reports can also skew financial results, especially cash flow when it comes to tax reporting and reimbursements. Consider using automation software with features like digital receipt capture and digital document submission to speed up the process (especially for the employees on the road) and reduce manual data entry. Approvers can review and approve expenses from anywhere, streamlining workflows and speeding up the approval process. Built-in compliance checks flag policy violations instantly, ensuring every expense adheres to company regulations.
- Additionally, using software to automate recurring tasks improves efficiency, allowing you to dedicate more time to analyzing financial data.
- Payroll bogs you down, which is why at Intentional Accounting we’ve provided you with ways to save you time each month when you have to do payroll.
- Examine accounts payable to verify vendor invoices, balances, and accrued expenses.
- In such a scenario, listing down everything and going through each task accordingly can help make the process simpler and more efficient.
- To reconcile your accounts, compare your bank and credit card statements to your accounting records.
- Without a structured close, errors seep into accounts and statements and could easily misrepresent your company’s position and affect confidence in your financial reporting.
- A smooth year-end is much easier when you have stuck to an efficient month-end process through the year.
Inaccurate or missing documentation
- Inventory management is a critical component of the year-end close, as it directly impacts your cost of goods sold and overall profitability.
- Reconciliation of all balance sheet accounts helps verify that the financial statements are accurate and complete.
- This approach can also help you laser-focus your ideas and ensure your plans can be actualized in the coming year.
- To create your financial close schedule, start by listing all critical activities that are part of the year-end closing process.
- When choosing an accounting software, it’s important to consider factors like ease of use, cost, and features.
A close that feels less like a scramble and more like a celebration of everything your team and the whole business have accomplished. Each of these tasks has implications beyond the books – they influence audit readiness, strategic decision-making and stakeholder trust. Back up all financial data using secure cloud storage or other reliable methods to prevent data loss. Perform a physical count of inventory to validate recorded figures, making adjustments as needed.
Key Year-End Bookkeeping Checklist Items (+ Free Templates)
Begin gathering documents and reviewing financial data several weeks or even months before the end of the year. This proactive approach allows you to address any discrepancies early and prevent last-minute surprises. Reconciliations should be done regularly to identify and resolve discrepancies early, and year-end reconciliation ensures Year-End Accounting Checklist that no material errors are left unaddressed.
Improves accuracy
That’s the way that most people feel about the end of the calendar year, at least. Businesses have to wrap things up each calendar year, as well as every fiscal year. Read more about best practices to align your campaign with your financial team with this comprehensive article. Instead, they step into year-end focused and ready, fine-tuning the final numbers with confidence. Estimate income tax obligations based on profits, deductions, and allowable credits to avoid surprises during tax filing. Prepare for External AuditsIf an external audit is required, communicate dates and real estate cash flow prepare necessary documents in advance.
Accounts Payable And Receivable Review
Calculate an accurate estimate of the corporation tax liability using the applicable rate and include this in your cash flow forecast. All employee expenses (including any home working expenses) must be processed before the end of the financial year and included in costings for the correct tax year. If you’re giving annual bonuses, don’t forget that these are subject to income tax. Alternatively, if you decide to wait and pay bonuses after year-end, you can accrue for employers’ national insurance costs as well as the bonus and reverse when the payment is made.
Revenue Recognition
But with Vena, Tanger eliminated its checkmark-to-PDF checklists and integrated its general ledger data into its Excel spreadsheets to create a single source of truth. And with more time on their hands, Tanger’s auditors have identified and resolved transaction inconsistencies. Documenting the actual execution of the year-end close process, on the other hand, involves maintaining thorough records of the process.