Closing Out Your Year With QuickBooks Quickly and Easily

15 Jan Closing Out Your Year With QuickBooks Quickly and Easily

Ending your year and closing out your QuickBooks file can be a simple process but should be done in a through and careful manner in order to avoid serious misstatements that could cause both tax repercussions and bad decisions made on bad data.  On more than a few occasions I have come across a file that wasn’t closed out and reviewed  properly.  Those oversights often ended up in overstatement of income or understatement of deductible expenses.

• Clean up any Unknown or “Ask My Accountant” type accounts;
• Enter Amortization and depreciation entries;
• Make sure prepaid accounts have been drawn down appropriately;
• If your “Misc” account is more than $1000 consider reposting some items;
• Reconcile all the accounts that can be reconciled including liabilities;
• Write off any AR unlikely to be collected;
• Enter any inventory adjustments;
• Post unearned income such as large deposits for work to be done in a coming fiscal period or advance ticket sales to deferred income;
• Review payables for accurate balances;
• Reconcile payroll ledgers from payroll services with you accounting program;
• Review distributions and post against retained earnings for the period end;
• Review balance sheet and P&L detail for errors and misstatements;
• Generate 1099 forms;
• File annual reports if applicable;
• Scan tax documents and statements received or make a copy.
• Set closing date on QuickBooks file;
• Send accounting program file and copies of tax documents to tax preparer;
• Enter adjusting journal entries and match to the tax preparers adjusted trial balance.