End Of Year Bookkeeping Checklist

The end of the year is upon us, and it is time to get organized with your accounting records. If you talk to your CPA, he/she would highly recommend getting on a robust accounting system for your business.  Check out Quickbooks, Freshbooks, Less Accounting or Harvest. Leave the Excel spreadsheets alone!

This is not an exhaustive list, but an outline of what you need to
prepare for the end of the year

Enter final transactions for the year

  • Review tax form (1040-Schedule C) from prior year and compare to this year’s expenses
  • Enter ALL cash receipts for business expenses (taxis, business meals,subway, train)
  • Reconcile all your accounts and enter any missing transactions
  • Work on reducing receivables (Follow up with clients/customers to get paid)
  • Write-off bad debt if necessary, but work on getting paid by customers/clients first
  • Make SEP IRA or 401K contributions and donations to charity to reduce taxable income
  • Make all asset depreciation entries (only applicable for equipment that you had put on a depreciation schedule)

Organize: Make Life Easier on Your CPA and Understand What Happened During The Year

  • Organize receipts and statements for expenses that will be itemized on your Schedule C/1040
  • Review your budget and compare actual to budget which will help develop 2008 budget
  • Inquire from your CPA as to what reports, form and any other documentation are needed for tax preparation
  • Ask if year-end reports should be on a cash basis or
    accrual basis
  • Print out a copy of general ledger
  • Back up the Quickbooks file in case of any data loss
  • Send a copy of your Income Statement and Balance Sheet to your accountant at the end year to get an idea what your taxes will be in March 15 (quarterly tax payment) and/or April (personal income tax deadline).

Employee/Independent Contractors

  • Order 1099-MISC forms (Independent Contractors)  and W-2 forms (Payroll Employees) early. The forms are much cheaper if buy at Staples then via Quickbooks.
  • Get Independent Contractors and Employees current mailing address, SSN and the total payments made to them for the year.

4 thoughts on “End Of Year Bookkeeping Checklist

  1. Another accounting/invoicing option is Time59 (www.time59.com). It’s designed for solo professionals and has a 30 day free trial. If you bill by the hour for your services it’s a great tool to have.

  2. Another invoicing option is Time59 (www.time59.com). It’s targeted at solo professionals and is a great solution if you don’t need (or want to pay for) the multi-user capability of Freshbooks (great product by the way). Bottom line: If you are solo and bill by the hour it is definitely worth a look. The first 30 days are free.

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