Making A Year-End List - Checking It Twice!

The end of the year is upon us and that is always a very busy time for me.  I find that December goes by rather quickly and my list of tasks to wrap up the year seems daunting.  I find that a checklist helps to make sure I don’t forget anything and helps clear the clutter.  Here are a few ideas to add to your list…make sure to check it twice

1.      Reconcile A/R and A/P

Make sure to reconcile your accounts receivable and accounts payable balances to the general ledger.  Are there any accounts on the A/R schedule that are deemed as uncollectible?  If so, you will need to set up an allowance for doubtful accounts.

 2.      Take Inventory

Have you made sure to account for inventory correctly?  Most accounting software will adjust this for you automatically as you buy/sell product, but just in case it never hurts to print out a report and review it for accuracy.  Perform an inventory count if you find discrepancies.

3.      Review Assets and Depreciation

Did you purchase any new assets this year like buildings, vehicles, or office equipment?  Make sure those assets are added to your depreciation schedule if they went into service in 2017.  You can also look into the Section 179 deduction depending on your type of asset purchase. 

On the flip side, did you dispose of any assets this year?  If so, be sure to remove them from the asset list so you are not continuing to pay personal property taxes on them next year.

4.      Purchase Orders

Look at open purchase orders with no activity.  If a goods received document has not been entered or an invoice has not been received against a PO find out why.  Is there a long lead time on the item or has the vendor overlooked sending you an invoice?  It is a good idea to ask for a statement of account from major vendors before the end of year to make sure all invoices have been received and accounted for.

5.      Verify Accruals

Look at all your accrual balances to know you are on track for recognizing expenses in the correct year.  For instance, I always look at the calendar to estimate the accrual for salaries based on when our last payroll of the year is going to be.  Here are a few items to note:

Do you rent your building? – Make sure to account for utilities and any property taxes you owe even if you haven’t received a bill from your landlord yet.

Pre-paid Expenses – Make sure balances are accurately reflected before 12/31/17.

Sales Tax Payable – December 2017 sales taxes to be paid in January 2018 need to be accrued on 2017 books.

6.      Review Old Records

Don’t let records take up valuable real-estate in your office that could be used in more productive ways like phone booth rooms or informal meeting space.  Do you have every single bank statement since your business started?  If you answered yes to this question it is time to purge.  Go through old records yearly and make a plan as to what you can shred in 2018.   Each type of record has a different retention period.  Most records can be shredded after 7 years.  If you can, consider making 2018 the year you move to electric records and eliminate the pages all-together.

7.      Backup, Backup, Backup

I can’t stress enough how important backing up data is. Ransomware is becoming more and more rampant with 38% of businesses being affected in the last 12 months. 20% of those had to stop operations immediately and 12% actually lost revenue.  Even if you are backing up data every day or every hour to the cloud, make sure to do one final year-end backup to a standalone hard drive and take it offsite to a secure location and remember that your business is only as good as your last backup.