Bookkeeping for the New Year: Essentials for Successful Bookkeeping
January 5, 2023
As the start of a new year begins, it’s never too late to make sure your business financials are in good shape. A year-end bookkeeping checklist is a great way to ensure that everything is in order before you start your new year. This checklist contains all of the important tasks that need to be completed in order to stay on top of your business finances throughout the year.
From reviewing and reconciling accounts to filing taxes, this checklist will help you stay organized and on top of everything for the coming year. With these simple steps, you can ensure that your business is in the best possible shape for 2023.
1. Finalize Bank Reconciliations
It's important to make sure that your bank accounts are reconciled for your end-of-the-year accounting so that any discrepancies can be identified and addressed. You should review all bank statements, make sure all transactions are recorded correctly, and reconcile any differences between your bank accounts and your books.
2. Review Accounts Receivable for any Uncollected Invoices
If you have invoices that have not been paid yet, you should review them and make sure they are still valid. You should also ensure that any late payment fees are correctly charged and applied.
3. Review Accounts Payable for any Unpaid Invoices
Just like accounts receivable, you should also review your accounts payable and make sure that all invoices are paid in full. You should also review any discounts or early payment discounts that you may have received.
4. Close Out Sales and Inventory Accounts
It's also crucial to make sure you close out your sales and inventory accounts to ensure that all transactions are accounted for. You should also make sure that all sales taxes are paid and that all inventory is correctly valued.
5. Monitor Cash Flow Trends
It's important to monitor your cash flow trends to identify potential problems. You should look at the cash flow statement to identify any changes in the amount of money coming in or out. You should also look for any signs of cash flow problems, such as late payments or overextending credit.
6. Perform General Ledger Cleanup
If there's a perfect time to clean up your general ledger, it's now. Take the time to review your general ledger and identify any errors or discrepancies. Make sure all entries are accurate and up-to-date. This will help keep your financial information organized and ensure that all transactions are properly recorded.
7. Review and Prepare Financial Statements
Reviewing and preparing financial statements is important in monitoring cash flow trends. It's crucial to set aside time to review your balance sheet, income statement, and cash flow statement to ensure accuracy and identify any areas of concern.
8. Review Internal Controls
Internal controls are essential for preventing fraud and protecting your finances. Make sure to review and update internal controls regularly to ensure they are working effectively. This includes reviewing access rights to financial information, setting up checks and balances, and monitoring transactions.
9. Review Inventory and Asset Management
Take the time to review your inventory and asset management. Make sure that all items are properly accounted for and that all assets are accurately valued. This will help you better understand the financial health of your business and ensure that you are maximizing your resources.
10. Re-Evaluate Your Current Bookkeeping Process
Periodically re-evaluate your current bookkeeping process to ensure it is still meeting your needs. Consider changes or improvements that could help make the process more efficient. Also, make sure you are following the appropriate laws and regulations related to bookkeeping and financial reporting.
Staying on top of bookkeeping at the start of the year is an essential part of running a successful business. By following the checklist provided, you can ensure that all of your financial information is accurate and up-to-date as 2023 begins. Taking the time to review your accounts, update your records, and reconcile your accounts will help you avoid any costly mistakes or surprises come tax time. Staying organized and taking the time to assess your finances will help you start the new year off on the right foot.
Whether it's the end of the year or a period of time throughout the year, it is important to maintain a checklist and use the right tools to ensure the accuracy and efficiency of your bookkeeping process. That's where Firm360 can help. Our software is designed to streamline your bookkeeping process and make it easier to manage your finances. With our integrated reporting feature, you can easily keep track of everything, from financial statements to tax returns. Book a demo today to find out how our accounting practice management software can help you take your bookkeeping to the next level.