Month End and Year End Checklists
Part One: Closing Your Books at Month-End
If you ordinarily perform month-end closing activities you may have already completed the following tasks. Otherwise, please review this list before moving on to “Part Two: Closing Your Books at Year-End.”
Adjustments
_ Automatic payments (bank drafts and adjustments)
_ Transactions not yet entered: invoices, bills, sales commissions and royalties
_ Transactions entered or coded incorrectly: invoices, bills, sales, payroll
_ Infrequent transactions: returns, voided, corrected or reissued paychecks, tax payments, vendor refunds
_ Inventory adjustments
_ Job adjustments or allocations
_ Payroll adjustments
_ Adjustments for taxes: sales tax, payroll taxes, franchise taxes, etc.
_ Fixed assets: depreciation entries
_ Loan payments: allocating interest and principle
_ Aged accounts receivable: any to be written off as uncollectible
_ Accruals
_ Any questions that would lead to a journal entry
Integration
_ Revenue and cost of goods sold/inventory entry
_ Job costing
_ Payroll
Reconcile
_ Bank statement additions and corrections to cash accounts (PayPal?)
_ Petty cash
_ Accounts receivable
_ Credit card statements
_ Equity accounts
_ Loans
_ Accounts payable
_ Inventory
_ Fixed assets
_ Any other asset or liability accounts
Review
_ General ledger coding consistency: is the transaction coded completely and to the right account?
_ If class is used, is it complete for all transactions?
_ If job is used, is it complete for all transactions?
_ Is the backup documentation in order?
_ Are authorizations complete?
_ Do the transactions look reasonable?
Payroll
_ Is documentation for new hires complete?
_ Is the hourly rate or salary amount correct?
_ Are hours accurate for hourly employees?
_ Is overtime paid at the agreed-upon rate?
_ Are deductions taken?
_ Are taxes figured correctly?
_ Are payroll deposits made on time?
_ Are there any court orders that need to be followed?
_ Is tax taken out of bonus checks?
_ Are there any checks that are paid directly to employees?
_ Are employee loans accounted for and collected?
_ Are expense reports in order and coded properly?
_ Are payroll reports filed timely (quarterly)?
_ Are state unemployment payments and reports handled accurately?
_ Are there any cash payroll transactions (illegal in many states)?
_ Are all transactions booked correctly?
_ If payroll is charged to classes or jobs, are classes/jobs charged appropriately?
Reports
_ Monthly profit and loss
_ Sales reports
_ Balance sheet as of month end
_ Aged accounts receivable
_ Reports by job or class
_ Budget vs. actual reports if applicable
_ Any memorized report that is routine
_ Generate task list from report analysis
_ General ledger
_ Missing checks report
_ Voided/deleted transactions
_ Audit trail
_ Payroll reports
_ Vendor reports
_ Ledgers from any accounts that need special review
Backup
_ Make backups
_ New backup system needed?
Part Two: Closing Your Books at Year-End
Year-End Checklist
Here are twenty Critical Areas for Review at Year End:
1. ___ Accrue any year-end costs associated with payroll and post to payroll expense and payroll liabilities.
a. Review your fringe benefits to ensure they are accurately reported for the year.
b. Ensure all your employee information is correct for year-end reporting (W-2, W-3, 940, CA DE7).
2. ___ Ensure all your vendor bills are posted by the year-end close date.
3. ___ Invoice your clients to finalize any outstanding unbillable revenue to date.
a. Adjust outstanding receivables that are deemed to be uncollectible against bad debt expense.
b. Review if any should be sent to an outside collection agency for assistance.
4. ___ Review your 1099 vendor information to make sure it is complete. (Check for Name, Address, Tax Id, Accurate coding of expenses as to whether they are eligible for 1099 tracking, etc.)
5. ___ Reconcile
a. Your bank accounts.
b. Your credit card accounts.
c. Your loan accounts.
6. ___ Conduct a physical inventory count and record adjustments.
7. ___ Adjust any prepaid items, such as insurance, that need to be expensed.
8. ___ Journalize any other accruals for year end that won’t be paid until the following year.
9. ___ Calculate and record amortization, depreciation, and any other necessary year-end adjusting journal entries (you may get these from your tax preparer, after the tax return is complete, but don't forget to ask for them and post them to your accounting software)
10. ___ Review your asset and expense balances to ensure that all fixed assets have been accurately recorded for any purchases or selling of assets.
11. ___ Update any changes in employee or sales tax rates for the New Year.
12. ___ Ensure any prepaid deposits received from clients throughout the year are adjusted to earned revenue.
13. ___ Review and update the business plan to include changes anticipated for the upcoming year as needed.
14. ___ Prepare the budget for the New Year if not done so previously.
15. ___ Prepare year-end reports, W-2, W-3, 940, CA-DE7, 1096, 1099 and any other applicable forms and remit to appropriate parties.
16. ___ Check to see if any local licensing or permits need to be filed with year-end data.
17. ___ Review memorized transactions to ensure they are still applicable for the New Year.
18. ___ Print your year-end reports, which should include
a. Profit & Loss Statement
b. Balance Sheet
c. Accounts Receivable Aging
d. Accounts Payable Aging
e. Budgeted vs. Actual
19. ___ Schedule a time to review the information with your tax advisor to see if the information seems reasonable to them.
20. ___ Ensure you have a regular backup process that includes verifying the data to help minimize any data loss. Consolidate and condense if needed for performance.
As always, if you need help or want more information about this process, please call 760-722-6839 or visit http://tinyurl.com/ybg6fy2 and enter "YR End" in the Additional Comments box and we will contact you.
For additional resources see Blog Article: http://tinyurl.com/YR-END-Resources