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Tips for Closing Out Year End

December 2, 2015 by Aaron Thomas
Copeland Buhl

Along with the holiday season, accountants have the added stress of winding down the books for the current year.  This involves making sure all transactions are book for the year, collecting on accounts which are overdue, and paying down payables to reduce tax liability for cash basis tax payers.  On top of it all, year-end software updates need to be scheduled, budgets updated for 2016, 1099 and w-2 to process, and this year an added bonus of complying with the Affordable Care Act (ACA).

Here are a few suggestions to help stay organized this end of year.

  • Schedule early with software consultants to install year-end software updates and 2016 payroll tax tables.  Consultants are busy this time of year, so scheduling early ensures you are on their radar.
  • If you have an inventory to count at 12/31, schedule with your accountant if they need to be present.  Otherwise set expectations with customers and vendors if your hours will be reduced during the count.
  • Write off any old receivables which cannot be collected
  • Write off any inventory which is obsolete
  • Come to terms with any vendors’ invoices which are in dispute
  • Reconcile any prepaid or accrual accounts
  • Update fixed assets for asset additions or disposals
  • Make sure you are caught up with your bank account reconciliations
  • Print the following reports and make sure the sub-ledgers tie to the general ledger ahead of time:
    1. General Ledger trial balance
    2. Accounts receivable aging
    3. Accounts payable aging
    4. Inventory stock status
    5. Fixed assets cost basis and depreciation reports
  • Review 1099 processes, and ensure you have the correct forms
  • Review w-2 process and ensure you have the correct forms
  • Obtain and review documentation for the year-end closing of accounting software
  • Review your chart of account and ensure the proper type (balance sheet/income statement) is assigned to each account. These settings dictate what accounts close to retained earnings at the end of the year.
  • Setup the next calendar or fiscal year in your accounting system
  • Finalize and import or update budgets for 2016
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