Perhaps work is slow in December in the field, but there’s enough to do in the accounting department to keep two people busy. Start now to get your books ready for year end so that January will be less hectic and you’ll only need to worry about W-2s, 1099s and payroll quarterly and year end payroll reports.

Here’s how to do it in QuickBooks (or any other program for that matter, the theory is the same):

Year end work to be typically means proofing all balance sheet accounts as of the end of November so that you’ll know where and what needs to be researched in advance of year end. At that time (after the 11/08 review) everything else should take care of itself for year end and be relatively straightforward.

So start a few file called “year end 2008 review); start with the Balance Sheet of 12/31/07 from the tax return and make sure that QBP balances as of the end of last year = that of the tax return; then print the Balance Sheet as of 11/30/08 and then start reconciling all balances to outside source documentation. When reconciled, place photocopies of those balances together with the QBP reconciliation statement (or report print out) in the file – assets on the right, liabilities on the left. By the time you’re done with this nearly everything should be tied down in the Balance Sheet except perhaps for depreciation if you don’t book depreciation monthly.

When the Balance Sheet is perfect (to the penny) then the Profit/Loss will be also perfect (to the penny), although expenses might have been posted erroneously in the Profit/Loss. This is checked by reviewing account balances for reasonableness and checking against budget to actual.

Read the article entitled “Year End Checklist” under Tips And Tricks.


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