Bookkeeping News// UP TO DATE BOOKKEEPING AND ACCOUNTING INFO

End of the Year Bookkeeping

End of the Year Bookkeeping Tasks
Although current and accurate financial records are important all year long, they are even more important as the end of the year approaches. A precise year end accounting of a company’s financial situation is essential to tax planning, tax preparation, assessing profitability and developing long range financial goals. This being the case, it is important for bookkeeping services providers to carefully examine a company’s ledgers, balance sheets and check registers as the year comes to a close to make sure there are no errors or omissions.

Some of these critical year end bookkeeping tasks are highlighted below.

• Examine Accounts Receivable
Collect payments wherever possible and write off uncollectable accounts as bad debt.

• Reconcile Bank Statements
As per credit union, Make sure that balances shown on bank statements match the balances shown on company balance sheets. Determine the status of outstanding checks and remove them from the books if they are unlikely to be collected.

• Examine Loan Balances and Interest Payments
Make sure that loan balances shown on loan statements match the balances shown on loan balance sheets and that the interest has been recorded as an interest expense.

• Identify Business Expenses Paid From Personal Funds
Examine the books to ensure that all business expenses paid from the personal funds of business owners are either reimbursed or recorded as contributions to the business.

• Identify Personal Expenses Paid From Business Funds
Examine the books to ensure that all personal expenses paid from business funds are either repaid or recorded as draws.

• Perform Year End Check of Transactions
Adjust the listing of any incorrectly posted transactions.

• Check Fixed Asset Accounts
Check the fixed assets of the company against those listed in the fixed asset accounts and remove any assets that have been retired or sold.

• Take Year End Inventory
Take inventory on December 31st and make necessary adjustments to inventory accounts.

• Collect Year End Tax Data – Perform any necessary end of year tax preparation tasks such as gathering home office expenses and completing mileage logs.

An accurate year end accounting of a company’s financial situation is a necessary prerequisite to calculating a company’s book value, generating the financial reports required by investors and lenders and substantiating certain tax related items as tax credits and tax deductions. In addition, it provides the information necessary for the business owners maximize profits and operate efficiently in the coming year.

If your business is seeking an outsourced bookkeeping solution, the experienced professionals at Orange County Bookkeeping can provide you with the expertise you are looking for. Our licensed accountants and bookkeepers are equipped to serve Orange County businesses of any size, structure or industry focus. Visit us today at www.ocbookkeeping.com to learn more about our full range of bookkeeping, tax and business consulting services. Contact us by phone at 949.242.9852 at or by email at info@ocbookkeeping.com to receive a free, no obligation consultation.