As the year draws to a close, it’s crucial for small business owners to get their books in order. Proper bookkeeping not only helps with tax filing but also provides a clear picture of your financial health. It ensures that all income, expenses, payroll, and other financial transactions are accurately recorded and organized.

Organizing your financial records doesn’t have to be overwhelming. A year-end bookkeeping checklist can make the process simpler and more manageable. By following this checklist, you can ensure that all your financial documents are in place and ready for your CPA. This will help minimize adjustments, save on tax preparation fees, and provide peace of mind.

In this article, we will walk you through a detailed year-end bookkeeping checklist prepared by Probooks NY. This guide will help you organize your income records, review expenses, reconcile accounts, prepare payroll records, and get all necessary documents ready for your CPA. Let’s dive into the steps you need to take to close out the year on the right financial footing.

Organize Income Records

Start by reconciling all your bank statements, credit card statements, and PayPal accounts. This means comparing your records with these statements to ensure they match. This helps to catch any discrepancies and correct them before they cause bigger issues.

Next, review and categorize all sales and income transactions. Make sure each transaction is recorded in the right category in your bookkeeping software. This will help you see a clear picture of your business income.

Confirm all customer invoices are issued and marked as paid. Check every invoice to see if it has been paid or if there are any outstanding payments. Address any unpaid invoices quickly to keep your cash flow healthy.

Lastly, double-check your income records against your deposits. Make sure every deposit in your bank account matches an entry in your income records. This ensures that no income is missed and everything is accurately accounted for.

Review Expenses and Prepare Payroll

First, verify that all business expenses are categorized correctly in your bookkeeping software. This includes everything from office supplies to travel expenses. Proper categorization makes it easier to prepare for taxes.

Confirm that all recurring expenses, like rent, utilities, and software subscriptions, are recorded. These regular expenses should be noted consistently to avoid any surprises.

Match all receipts to transactions to ensure all deductible expenses are accounted for. Keeping receipts organized helps during tax time and ensures you can back up your expense claims.

When preparing payroll records, confirm all payroll transactions are complete and accurate. Make sure everything from salaries to bonuses is recorded correctly.

Ensure W-2s and 1099-NEC forms are prepared for employees and contractors. These forms are necessary for tax filing and must be accurate.

Lastly, reconcile payroll taxes and ensure all liabilities are paid. This step ensures you are compliant with tax laws and helps avoid any penalties.

Reconcile Accounts and Manage Inventory

Reconcile all your bank accounts, credit cards, and loan statements with your bookkeeping records. This means checking each transaction to ensure it appears correctly in your books. This step is vital for maintaining accurate financial records.

Resolve any discrepancies you find between your statements and your recorded transactions. These can happen due to errors or overlooked entries. Addressing them now prevents bigger issues later.

Count your year-end inventory and adjust your books to match accurate stock levels. Having the correct inventory count helps you understand your business’s actual value.

Identify any obsolete or unsellable inventory. Write these items off from your books to reflect a more accurate inventory value. This step is key for making room for new, sellable products.

Prepare Tax Documents and Verify Liabilities

Start by collecting W-9 forms for vendors requiring 1099s. These forms are essential for reporting payments made to contractors and vendors.

Compile records of all quarterly estimated tax payments made throughout the year. This helps show what has already been paid and what may still be owed.

Note any large or unusual expenses for your CPA to review. Identifying these now can help streamline the tax filing process and avoid surprises.

Confirm that all outstanding loans and credit balances are accurate. Make sure these debts are properly recorded in your books.

Record all interest payments made on loans and lines of credit. Accurately tracking interest payments ensures your liabilities are correct.

Ensure all sales tax liabilities have been paid and reported accurately. This is crucial for staying compliant with state and local tax regulations.

Conclusion

Taking the time to complete this year-end bookkeeping checklist will set your business up for success. By organizing income records, reviewing expenses, reconciling accounts, and preparing tax documents, you can ensure accurate and complete financial records.

Preparing your books properly helps minimize adjustments with your CPA, saving you time and money. Plus, it gives you peace of mind knowing your finances are in good order as you move into the new year.

If you need assistance with any of these steps or have questions, contact Probooks NY. Our team is here to help make your year-end Manhattan bookkeeping process smooth and stress-free. Let’s simplify your finances together!