Year-End Close Checklist: The Essential Steps for Accountants
For accountants, the end of the year is an especially important one in the world of numbers and finances. It is like warping up a big book and then opening a new one. In order to get this process done smoothly and accurately, accountants follow a Year-End Close Checklist.
There are Essential steps for Accountants.
Step 1: Review Financial Statements
At the end of the year, accountants begin with the financial statements. These are like the business's report cards. You are looking over your report card to make sure all the grades are right. So, accountants would like the statements to reliably indicate how well the business has been doing this year.
Step 2: Bank statements Reconciliation
Reconciliation is like putting all the statements together. The accountants compare the company's records with the bank's records to see if they correspond exactly. A little like reconciling your checkbook, where you have to make sure that everything that goes in goes out, and everything that goes out goes in.
Step 3: Accounts payable
Accounts Payable is an IOU list. When accountants go over this list, they check to see if the company has any outstanding obligations to anyone. It is like looking at your shopping list to see if you have forgotten to pay for something. This step ensures that all the bills are there and that they all get paid on time.
Step 4: Early Checks on Accounts Receivable
The other side of the coin, Accounts Receivable, is a list of money others owe the firm. Ensuring that everyone who owes money pays up is the desire of accountants. It is like asking if your friends are going to return the toys they borrowed from you.
Step 5: Verify Inventory
Inventory means taking stock of all the items, goods, merchandise, and materials in a store. The number of items is counted to make sure the records agree. It means that no item is missing or hiding away. This is how the business knows precisely how many items it has in stock.
Step 6: Toy Value Change Check
It is like saying toys lose value over time. This is looked at by accounts to ensure that the depreciation in the value of machinery or equipment is being taken into consideration. It is like grasping that your cherished plaything is no longer as lustrous as it used to be.
Step 7: A Glimpse at Employee Benefits Review
Employee benefits are like that extra candy that comes with a job. Accountants verify that health insurance and retirement plans have been recorded properly. It is like making sure everyone gets their share of snacks at a party; in this case, it is work-related bonuses.
Also read: Year-End Accounting Checklist For 2023
Step 8: Tax Preparation
Tax preparation includes returns of federal, state, or local tax returns. Taxes are like a piece of your birthday cake you give to the government. And as tax season approaches, accountants begin to get everything in order. It is like making sure you have got all the ingredients before you can bake a cake--in this case, all of the financial records must be ready for tax submission.
Step 9: Treasure Hunt for Valuables
Assets are the treasures of a business. These treasures are checked by accountants to see whether they are still in good shape and are being used to their full advantage. It is like keeping your favorite games in working order. This step accounts for and properly manages the business 'valuables.
Step 10: Prepayments and Accruals
Accruals are like saving up for future bills, while prepayments are like paying bills while you still have them. These are looked over by accountants to make sure that everything gets counted in the appropriate time frame. It is like throwing everything into a suit case just in case you need it. In this case, you have to plan for future financial obligations.
Step 11: Putting on Detective Glasses Finances
Financial analysis is like wearing detective glasses. Accountants read the numbers to find out what they say about the company's state of health, like reading between the lines in a mystery book. This step helps accountants to assess how well the business is doing and where it needs to improve.
Step 12: Document Retention
Document retention is a box full of valuable papers. All financial documents must be properly stored by accountants. You want to go through and put all your favorite comics in order so you can find them right away when you need them. With this, important records are safeguarded for future use.
Step 13: Check business security
Just as security guards are important components of a business, internal controls are vital for maintaining accounting integrity. These controls are checked by accountants to see if they are keeping everything safe. It is like making sure the locks on your toy chest are good and sturdy. This step ensures that the business's financial information is safe.
Step 14: Financial Goals for the Future
Financial goals are future planning. accountants help the company set financial targets for the following year. It is as if you decided how many toys you wanted to collect by the end of next year. This step helps the business plan for a profitable future.
Step 15: Hold Closing Meetings
Closing meetings are like the curtain of a play. After a year's hard work, accountants gather to debate results. It is like partaking with the entire cast in the excitement of a successful performance. This allows everyone concerned to see the results and plan ahead.
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The bottom line
In other words, the Year-End Close Checklist is like going through a big checklist before a great journey. Everything must be in order, nothing can be missing, and all must be ready for the next big chapter. And so it goes. That is like making sure all your toys are in order before setting out for a thrilling adventure.