When the fiscal year draws to a close, accountants kick into fifth gear. In a profession where heavy workloads and tight deadlines are the norm, this can be a particularly stressful time. But it doesn’t have to be.
In this article, we’ll show you how you can reduce the pressure of end-of-year accounting with a simple checklist.
Read on to learn:
The benefits that a year-end accounting checklist can bring
The items you should include on your checklist
Potential pitfalls in the year-end accounting process
How technology can help
So, why do I need a year-end accounting checklist?
Accountants are known for being busy at the best of times. But when year-end looms nearer, even the most seasoned accountants have their work cut out to get everything done on time.
Year-end accounting is so challenging because there are so many different processes to complete — from preparing financial statements to gathering tax documentation, and everything in between.
Each task is complex in its own right, and often, tasks need to be completed in a certain order. Expand this process out over multiple clients, and you can see how things can quickly get messy. The potential for mistakes, inaccuracies, and incomplete processes is huge.
A year-end accounting checklist helps you to reduce the chaos by enabling you to:
Create a reliable, efficient, and standardised process
Break complex tasks down into manageable bites
Improve your organisation, accuracy, and consistency
Adhere to regulatory compliance
Guarantee the completeness of your work
Reduce year-end stress
Our ultimate accounting year-end checklist
So what items should you include on your end-of-year accounting checklist? Below, you’ll find an example that we’ve put together. It’s worth noting, however, that your own checklist will depend on various factors, including:
The branches of accounting you specialise in
Whether you’re an accountant at a small business, a large enterprise, or an accounting firm
The types of clients you serve
1. Bank and credit card reconciliation
Bank reconciliation
Gather up-to-date bank statements, cancelled checks, and deposit slips
Compare the transactions on bank statements with the company's accounting records
Reconcile any discrepancies, such as outstanding checks or deposits in transit
Adjust the company's accounting records to match the bank statements
Prepare a bank reconciliation statement
Document the reconciliation process
Credit card reconciliation
Collect up-to-date credit card statements, receipts, and payment records
Verify the accuracy of credit card transactions against the company's records
Reconcile any discrepancies or errors
Adjust the company's records to match the credit card statements
Prepare a credit card reconciliation statement
Document the reconciliation process
2. Inventory, fixed assets, and depreciation
Inventory
Conduct a physical inventory count to determine actual quantities on hand
Compare the physical count with the recorded inventory balances
Identify and investigate any discrepancies or variances
Adjust the inventory records accordingly
Review and update inventory valuation methods, if necessary
Document the inventory reconciliation process
Fixed assets
Review the fixed asset register to ensure accuracy and completeness
Verify the existence and condition of fixed assets through physical inspection
Update the fixed asset register with any additions, disposals, or transfers
Calculate depreciation expenses for each fixed asset and update depreciation schedules
Identify and evaluate any impairment indicators for fixed assets
Document any changes made to the fixed asset register
Payroll
Review and verify employee payroll records for accuracy and completeness
Reconcile payroll records with payroll tax filings and other related reports
Ensure proper classification of employees, including full-time, part-time, and contractors
Confirm the accuracy of tax withholdings, benefits deductions, and contributions
Reconcile payroll bank account statements with payroll disbursements
Document any adjustments or corrections made to the payroll records
Benefits
Review employee benefit plans and programs for accuracy and compliance
Verify the accuracy of employee benefit deductions and employer contributions
Reconcile benefit plan records with payroll and general ledger accounts
Update employee benefit information, including enrollments and terminations
Document any changes or adjustments made to employee benefit records
3. Accounts receivable and accounts payable
Accounts receivable
Review outstanding invoices and ageing reports
Confirm the accuracy of customer account balances
Identify any overdue or uncollectible accounts and initiate appropriate actions
Accrue bad debt expenses for uncollectible accounts, if necessary
Reconcile the accounts receivable sub-ledger with the general ledger
Document any adjustments or write-offs made to accounts receivable
Accounts payable
Review outstanding vendor invoices and ageing reports
Confirm the accuracy of vendor account balances
Identify any accrued business expenses or unrecorded liabilities
Reconcile vendor statements with accounts payable records
Adjust the accounts payable sub-ledger with the general ledger
Document any adjustments or accruals made to accounts payable
4. Financial statements
Prepare and review accurate financial statements, including the balance sheet, income statement, and cash flow statement
Analyse financial ratios and key performance indicators (KPIs)
Document any adjustments or reclassifications made to financial statements
5. Tax documentation
Gather necessary tax documentation, including income statements, expense records, and supporting documents
Prepare and file the required tax forms, such as corporate income tax returns or individual tax returns
Ensure compliance with tax regulatory and reporting requirements
Review and reconcile tax
6. Internal controls
Evaluate the effectiveness of internal controls and identify any weaknesses
Implement necessary improvements to strengthen internal controls
Perform a risk assessment and update risk management strategies
Review and update fraud prevention and detection measures
Conduct employee training on internal controls and ethical behaviour
7. Budgeting and forecasting
Review actual financial results against the budget
Identify variances and analyse the reasons behind them
Prepare a budget for the upcoming year based on future cash flow projections
Update forecasting
Potential pitfalls in the year-end accounting process
Accounting is a notoriously complex process at the best of times. But as the fiscal year comes to an end, the pressure can ramp up — and the risk of errors or issues grows. Here are some common examples of how things can go wrong:
Incomplete or inaccurate record-keeping and documentation
Poor time management
Process bottlenecks
A lack of communication among team members
Failure to comply with accounting standards and regulatory requirements
Insufficient backup and security measures
How technology can help deliver a smooth year-end closing process
The issues we outlined above can be crippling, leading to stressed employees, inaccurate work, and dissatisfied clients. But there’s a simple way to avoid these problems altogether.
With the right tech, you can streamline, enhance, or automate most of the processes we’ve outlined in this article. Let’s take a look at some examples.
Accounting software
Accounting software plays a central role in streamlining and facilitating year-end accounting processes, helping you to ensure a high level of accuracy while saving countless hours wasted on manual data entry, calculations, or processes.
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Here are just some of the ways accounting software can help:
Auto-generated financial statements based on accurate accounting data
Reconcile bank accounts automatically
Reporting and analytics to support year-end financial analysis
Automated accruals and deferrals
Built-in compliance with accounting standards
Integrations with your other systems, ensuring smooth data transfer
Task management tools
Year-end accounting involves a lot of moving parts, with key tasks often spread across teams. Task management tools allow you to keep track of projects and tasks, providing top-down visibility of progress towards goals.
With a task management tool, you can:
See all tasks, deadlines, and dependencies in one place
Collaborate and communicate effectively
Automate reminders and notifications to ensure you stay on track
Document collection tools
The year-end accounting process often requires you to gather a lot of information — everything from your clients’ tax-related documents to bank statements, invoices, and receipts.
Without a dedicated tool to facilitate this process, things can get messy fast. Key attachments get lost amid endless back-and-forth emails, or buried at the bottom of bursting inboxes. This is where document collection tools can help.
With a tool like Content Snare, for example, you can:
Create custom forms — or choose one of our ready-made templates
Request a wide range of file types, content, and documentation
Send automated follow-ups
Receive sensitive documents securely
Communicate with clients about submissions without resorting to email
Integrate with your existing tech stack
The result is a streamlined document collection process. You get all the information and documents you need on one intuitive platform. For your clients, Content Snare simplifies the process of submitting information, allowing them to tackle the process a step at a time.
Streamline your document collection process with Content Snare
Simplify the way you gather information from clients by creating powerful custom forms — or use one of our ready-made templates instead. And with automated reminders, you can get the documents you need when you need them.
