Life at year end
Year-end is where it all happens!
It's That Time Again
It is the time of year when we all to give ourselves
wholeheartedly to getting your year end accounts
straight We're well fed from the Easter break, and anxious to
tackle a new challenge.
Year-End Financial Statements
The year-end financial statements are the most important reports
we issue. They will be used for tax preparation, future reference,
and decision making more so than any other monthly reports we
prepare.For that reason we need to spend more time making sure we
are correctly reflecting accurate information.As a timely refresher
we are providing a simple checklist of items that you should
consider for each business you are working with when ensuring the
accuracy of your year-end books:Once you have completed this list,
and before putting the books away for the year, make sure you run
the financial statements by the owner/manager to identify anything
you might not be aware of.The best way to do this is to arrange a
meeting where you can show them the completed financial statements
and review the balances of each account, including the subsidiary
ledger balances.Throughout the review ask the question, "Do these
balances seem reasonable?" At the end of the meeting ask, "Are
there any other assets or liabilities that I haven't included?"
Occasionally, they might surprise you with an event that you didn't
have any knowledge of before, but that will effect your
books.Finally, the last step of the year-end process is to check
your Sales, Cost, and Expense accounts. Compare them to prior years
to see if any increase or decrease is reasonable. If you run across
some significant changes, you may want to look at the general
ledger for that account to ensure the entries are legitimate.As you
follow this year-end process you will be amazed at how much you
learn. You'll see trends and practices that will help you in
consulting with the client and help him/her run their business more
effectively.In fact, often times the accountant will know more
about the business finances than the owner. That's why so many
Universally trained accountants diversify into new businesses
because they see opportunities going untapped.So, this year, take
the time and make the effort to be precise so that you can go into
2013 with reliable balances and peace of mind.
Year-End Accounting Checklist
- Does my general ledger bank balance reconcile to the bank
- Are there any accounts receivables that are worthless and
should be written off?
- Is my balance in Allowance for Bad Debts a reasonable estimate
of potential writeoffs?
- Is the company's inventory balance correctly stated?
- Are there inventory items that cost more than their worth and
should be written down to their market value?
- Does the company still have all the fixed assets?
- Is my depreciation correctly recorded for those fixed assets
still in the company's possession?
- Did I amortize goodwill and franchise fees?
- Are there any prepaid items that need to be adjusted such as
- Have all assets been reviewed for accuracy?
- Have we recorded all of our payables?
- Do the payroll tax liabilities coincide with our quarterly
- Do the balances in the notes payable accounts (loans) agree
with what the banks say we owe?
- Are there other debts that have not been included on the
- Are there debts on the books that no longer exist because of
forgiveness or oversight?