As we get closer and closer to year-end, most businesses will begin to think about taxes. Now is the time to get everything in order and prepare for tax planning. By being proactive, you can get a handle of your tax situation before the turn of the calendar. Here is a short must-do checklist for your year-end bookkeeping.
1. Reconcile the Books
The best thing you can possibly do for your bookkeeping and taxes is to reconcile your accounts. A reconciled account tells your bookkeeper and tax preparer that everything up to date. It is important to reconcile loans and lines of credit as well as banking and credit card accounts.
2. Ask My Accountant Review
During the year, use or create an “Ask My Accountant” expense account for any questionable transactions. If you come across a transaction that you are not sure of, code it to “Ask My Accountant”. Once you have had time to do some research, you can code it appropriately. This will at least allow you to keep the books reconciled, which is the most important bookkeeping task on this list. If it is something you need help coding, just keep it in “Ask My Accountant”. Using “Ask My Accountant” keeps all of your questions organized in one spot for easy review with your accounting firm before year-end.
3. Clean Up AR and AP
Maintaining clean accounts payable and receivable is something we always recommend. Running your aging reports on both accounts receivable and payable may reveal some problems or maybe just some errors. Common accounts receivable errors are not offsetting credits against old invoices. Looking over aged payables may reveal some old inaccurate balances.
Don’t wait until year-end passes to start thinking about bookkeeping and taxes. If you have questions or would like help with your bookkeeping, please contact us.