Here we discuss the most important step of the Year End Checklist
Year End Transactional Entries
■ Enter Final A/P
- Have you recorded all expense items as of the end of the year?
■ Issue Final A/R Invoices
- Have you issued all invoices and applied cut off procedures?
■ Process Final Payroll
- Are all payroll year end items recorded? Fringe Benefits?
BALANCE SHEET ACCOUNT ANALYSIS
■ Reconcile Bank Statements
■ Prepare A/R Aging
- Are you going to collect all A/R? Write off amounts not collectible as bad debt.
- Verify both physical count and valuation.
■ Prepaid Expenses
- Do you have expensive items that should be spread out over the year? Annual memberships etc.
■ Fixed Assets
- Confirm gain/loss on fixed asset sales
- Calculate and record year-end depreciation
■ Accounts Payable
- Do you have vendors with credit balances, if so request refunds?
■ Profit & Loss Statement
- Compare current year Profit and Loss Statement, compare:
- Significant variances to budget
- Compare large variances year over year
■ Balance Sheet
- Print Balance Sheet and confirm all account reconciliations
■ Cash Flow
- Print Cash Flow report and compare to forecast/budget
YEAR END PAYROLL TASKS
- Confirm with the payroll service provider what forms are required and order as necessary
- Prepare or verify Quarterly 941 and Annual 940
- Verify State Quarterly and Annual forms
- Prepare or verify W-2’s and W-3
- Verify you have current W-9 on file for all required payees
- Review Vendor List for 1099-eligibility. Identify all G/L accounts for 1099 eligible services
- Determine reportable amounts for 1099’s. Exclude payments made through third parties (on credit cards or through PayPal-type services). Ensure the threshold is met in each category of payment.
- Prepare and review Annual 1096 and attach Copy A of all 1099’s