9 Accounting Tasks to Consider Before Year-end

It’s that time of year again – time to address the year-end tasks needed to close out your books before providing your accountant with all of the necessary reports needed to prepare your tax return. No matter which accounting system you use, there are things you can do now to prepare for 2017.

So what exactly should you be doing to wrap up the year? Here are a few points to consider.

1. Should you be issuing any Form 1099s for the year? Form 1099s are often required for any individual, LLC, or law firm that you’ve paid more than $600 for services. Ensure you have W-9s on hand for all vendors, and keep in mind that the deadline to file Form 1099 has moved up from February 28th to January 31, 2017, so you may want to get this information gathered sooner than later!
2. Does your company have inventory? If so, discuss taking a physical inventory count with your accountant.
3. Have all bank and credit card accounts been reconciled monthly? Check your reconciliations to ensure that all transactions have been recorded and agree to your bank and credit card statements.  This process can also help you verify proper account classification.  In addition, glance through your bank reconciliations to see if any stale dated outstanding checks or deposits in transit need to be voided and/or reissued.
4. Are major asset purchases recorded properly? Do you have a capitalization policy in place? If not, consult with your accountant to determine what items should be capitalized.  If you are considering a purchase prior to year end, consult your accountant to discuss the most preferential tax treatments available.
5. Are customer and vendor accounts clean? Review your books for duplicates, missing information and old balances in Accounts Receivables and Accounts Payables. This process also allows for you to double check any customers and vendors that are no longer in use.  These can be hidden to avoid any confusion in the future.
6. Have you reviewed key reports? Now is a good time to review your financial reports. Have transactions been posted to the correct chart of accounts?  Do you understand the balance sheet and profit and loss statements?  Are unpaid bills and open invoices showing correctly?  Monitoring these reports can help identity areas needing further attention.
7. Were prior year adjusting journal entries discussed and booked if appropriate? Make sure that you have received any recommended prior year entries from your accountant. This can also be a good time to close out prior year distributions, if applicable.
8. Have you considered creating a budget for the coming fiscal year? If you are a QuickBooks user, take advantage of how easy it is to create a budget in the system. A budget can be a powerful tool to help manage your business.
9. Did you close the prior year? If you use QuickBooks, it is recommended that the prior period be closed and password protected in your QuickBooks file to avoid unintentional changes to prior year data especially while your accountant works with this information to prepare tax filings.

Now is the time to consider the tips above and address any potential issues. Working with your accountant on these items will put you in a better position to gain insights as to how your company performed in 2016, and you’ll be poised to tackle 2017 with a fresh start.

To learn more about what you should be doing before year-end, contact your accountant or a member of Kaufman Rossin’s QuickBooks ProAdvisors team.