CBG QuickBooks Year-End File Review

With the year quickly coming to a close, we hope you will find this QuickBooks Year-End Checklist especially helpful. We recommend you print a copy of your balance sheet and work down this list to verify each account.

Review Bank Reconciliations

Review the bank reconciliations for items over 3-6 months old and write them off if they have not cleared. If the checks are from the prior year, be very careful when you void them. Make sure bank reconciliations were completed for each month in the tax year to date.

Accounts Payable

Review accounts payable for item receipts that should have had bills posted against them or checks that were written without closing out Unpaid Bills. 

1099 Vendors

Check on 1099 vendors to make sure their vendor files are up to date and records are accurate. These are for individuals who have earned over $600 for casual labor. Run the 1099 reports to make sure they are all being pulled correctly. Check the settings in QuickBooks.

Receivables

Review receivables for credits that should have been posted to customers’ accounts or deposits that were entered without closing out the Open Invoices.

Employee Records

Review employee records to make sure addresses are correct, Payroll Items codes are pointed to the right accounts, and Payroll entries are entered accurately in the system. Total wages should agree with total forms 941. This number also needs to agree with the W-3 at year-end.

Sales Tax Payable

Verify that sales tax payable for the prior month on the balance sheet agrees with the payment made. Make sure all entries to sales tax discounts have been made in the proper month.

Expense Records

Review expense records to make sure major purchases are capitalized and not expensed. Each company sets its limits, but it can be anywhere from $200-1000 per item. The key is they are purchases for assets that can be used longer than a year (i.e., computers vs. paper clips).

Depreciation Schedule

If your accountant has prepared a depreciation schedule, be sure to enter the monthly depreciation entries for the year. They will debit depreciation expense and credit accumulated depreciation.

Retained Earnings and Owners Equity

Determine that Retained Earnings/Owners Equity agrees with the prior year’s trial balance and allocations are appropriate. Complete Business Group knows what your accountant needs for this report.

Inventory

Verify that your Inventory on your balance sheet agrees with your Inventory Valuation Summary. If it does not, then review all your inactive inventory items. It’s always a good idea to verify with a physical count. If you have a negative inventory, you have a workflow issue that needs to be corrected! Clean these up before the year-end.

Payroll Tax Liability Summary

Make sure that the payroll tax liability summary report agrees with the balance sheet for the same month-end.

Reconcile Credit Card Statement

Reconcile each credit card statement for each month to date. Review any outstanding or uncleared items.

Year-End Balance On Loans

Call all the banks or loan companies to find out the balance of all loans as of tax year-end, make sure the balance agrees. You may need to adjust the loan through Interest Expense.

QuickBooks Desktop Checkup

For users or QuickBooks Desktop, run a data integrity check, and a backup. Also, run printed reports for year-end. Balance sheet, Income Statement, a general ledger and a listing of the new fixed assets purchased for the year. Make sure your balance sheet is balanced!! (it can indicate a data integrity problem.)

Meals and Entertainment

Make sure you have substantiated all meals and entertainment records with notes as to your business purpose and who you took out to eat. We suggest entering detailed notes in the memo section of the entry and scanning a copy of the receipt.

Mileage

For all company vehicles, collect the mileage records for each vehicle, they should contain total miles driven for the year, how many were personal (includes commute), and how many businesses. The business miles should list the customers visited by date and miles are driven.

The above list is not intended to replace any tax advice but merely guide you in organizing your QuickBooks file to assist in preparing your tax return. Please consult your tax professional for details and clarification of the current tax laws and codes.

We hope you have a successful close to your business year. If you need support, we are here for you. Click here to schedule a support call with Complete Business Group.