With Halloween and the Thanksgiving Day behind us the last few weeks of every year simply zooms by. The last few weeks of the year is usually spent on planning for the next year. However, ensure that you find time to go through the current year’s books and close it effectively and efficiently.
One of the task that is of paramount importance is closing your company’s books so as to start the new year without much hassles. This is a standard year end task, and closing the books become easier if you have integrated a good accounting system in your business process.
Depending on your company type, closing the books involves going through the current year’s transactions, adjusting entries of the activities that have not been entered, ensuring that all the entries are categorized in the right and correct manner, and finally reviewing the entire accounts to ensure that all the entries balances and are accounted for.
Tips To Wrap Up End-Of-Year Company’s Book
Amount Receivables
Check all invoice you have raised for the work completed. Do not hesitate to check twice all the payments that you received. If there are any aged accounts receivables, cross-check them against the Balance Sheet and General Ledger. Make the necessary changes so that all the records match.
Accounts Payables
Ensure that you have paid all the bills. If you have outstanding bills mark them as accounts payables so that you are able to track in the future. Also, mark your vendor bills and vendor statements against the Balance Sheet and Accounts Payable Report.
Reconciliation
Go through your credit card and bank statements and check for discrepancies.
Ensure That All Checks & Invoice Numbers Are Accounted For
Remember that both the checks and invoices are generated in numerical order. Therefore, verify whether you have missed out on any of the check or invoice numbers. If any of them or deleted or voided, ensure to make a note of it in your accounting software.
Review Financial Statements
Its always wise to review your financial statements a couple of times. You should also consider hiring a seasoned accounted to do the job for you if you are not well-versed in reading the financial statements. If you feel there is any discrepancies, you need to investigate and make necessary corrections or adjustments so the records tally.
Update budget
Update the budget for the next year in accordance with the current facts and actual numbers as well as the current market conditions. That is, you need to take into account the various factors that is responsible for any variance and update the budget accordingly.
Last but not the least do not forget to back up the accounting software. Though its simple procedure, many a time we tend to neglect it. Take a vow to start the coming year by closing the books at the end of each month. This will make it easier for you at the end of the year. Remember, that financial health plays a vital role in the life cycle of any business. Therefore, to propel ahead and to make timely and effective decisions, you need to keep an eye on the financial health of your company.
