It's that time of year again... the time where you should be taking a look at your books to ensure they are in order for year end.  We do offer a service we call a "Data File Analysis" which is a comprehensive service designed to catch errors in your QuickBooks data file and provide a listing of items which need to be taken care of.  Call us for more information about this service but at very least, these are some of the things you should be doing at year end:
  • Ensure that bank reconciliations for all banking accounts are complete.  This includes checking, savings, money market, etc. accounts and includes business credit card accounts.
  • Look at the bank reconciliation reports and find the uncleared transactions section.  If there are any old deposits in this section, research why these deposits have not cleared the bank.  If there are older checks and debit transactions in this section, determine why these payments have not cleared the bank.  Make appropriate write-offs and adjustments as necessary
  • Look at your accounts receivable and accounts payable detail reports and ensure that each invoice showing up on these listings are legitimate.  If any amounts are actually not receivable (or payable) determine why these items are still showing up on the reports and make appropriate adjustments.
  • Verify that the petty cash amount listed, is the actual amount of petty cash that you have on hand.
  • Ensure that your prior year's balance sheet matches your prior year's tax return and prior year financial statements that were previously issues.  Ensure that any journal entries received from the tax preparer in the prior year were recorded in QuickBooks.
  • Close distributions or drawing accounts out to a prior year's distributions account or directly to retained earnings. Date this transaction on January 1st instead of December 31st.
  • Make year end accrual adjustments if needed.
  • Review fixed assets accounts and expense accounts for equipment that may have been purchased throughout the year.  Large equipment purchases should always be coded to the fixed asset accounts.
  • Ensure that depreciation entries have been made on a monthly basis based on prior year's fixed asset purchases.  Obtain a new depreciation entry from your tax preparer to be recorded monthly in the following year.
  • If you stock inventory, take a physical inventory count and reconcile this with your inventory listing in QuickBooks.
  • Check that payroll liabilities showing on the balance sheet actually match the amounts that are still to be paid to the various tax and other agencies.
  • Check that the sales tax liability balance on the balance sheet actually matches the amount still due.
  • Ensure that W-2's and 1099's are sent to employees and contractors, and that the appropriate forms are filed with the Social Security Administration. (You may just need to check with your payroll company on this)
  • Set a closing date password on your QuickBooks data file to ensure transactions are not changed in prior years after you have sent financial reports on to your tax preparer, investors, management, etc.
  • Backup your data and keep this historical backup of your company file.
  • Update W-4 forms for your employees if necessary
The above listing is definitely not a comprehensive listing, however it does cover the areas where many errors can be avoided.  In addition to the steps above, you should also be checking the integrity of your QuickBooks data file as well as checking the network setup to ensure that the data has not become corrupt or is not susceptible to corruption.  Call us for more information about about this.