Closing the books for the year is an important task in the annual financial reporting process. It involves identifying any balances on the company’s books and posting any adjustments. However, it can also be daunting. Even so, it’s important to have a comprehensive plan that’s ready to go. Luckily, there are a few things you can do to help make the process run smoothly. Download our Year-End Bookkeeping Checklist today.
Year-End Close Tips
Identifying, and overcoming, common year-end challenges can help reduce the chance of errors and headaches.
Here are some tips.
- Implement a pre-close meeting to help you identify and streamline tasks.
- Look into closing all temporary accounts, which are not actually closed, at the end of the fiscal year. This is because the same temporary accounts will carry over balances into the next fiscal year.
- Review your closing schedule to determine what should be posted and when. If you don’t have a formal process in place, it can be a challenge to ensure that all transactions are posted, especially when key people are out of the office.
- Post all of your transactions before the end of the year. Not only is this important because it helps prevent the chance of error, but it also allows you to save time and money.
Temporary Account Example
By the end of the 2022 fiscal year, XYZ Bakery has a balance of $50,000 on its temporary account. They would appear to have a sales volume of $120,000, but they’ll have to shift the remaining balances to their permanent accounts.
Basic Month-End Close Process
While these steps are common, the details can vary depending on the type of account you have. You may also want to consider using software to assist you with the process. The most basic month-end close process can be broken down into four steps:
- Verifying bills,
- Closing accounts,
- Adjusting entries, and
- Reopening periods.
There are a variety of accounting systems that are designed to facilitate year-end closes. Investigate your options before deciding which one is best for your organization (we can help!). Regardless of what you choose, it’s important to have a strong closing process in place to help ensure that your numbers are accurate and reliable.
Download Our Year-End Bookkeeping Checklist
Rather than drowning in a flood of paper and struggling to keep your head above water, trust our experts instead. Then you can stop feeling trapped in the back office handling bills, invoices, and other financial concerns to gain insight into your cash flow, establish internal controls, and even protect yourself year-end close from fraud.
A good year-end close process will help you:
- Stay on top of the important tasks,
- Look ahead at your end of the year,
- Implement a process tailored to your organization,
- Reduce stress, and
- Increase productivity.
Take advantage of our knowledge and expertise, so you can return to the core functions that make your business a success. Prepare for the annual book closing with our Year-End Bookkeeping Checklist – your accountant will thank you later.