What You Need to Know to Close Your Books for Year-End

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The end of the year is fast approaching, and for many businesses, this means it's time to close the books. Whether you're a small business owner or manage financials for a larger organization, the year-end process is crucial for ensuring your financial statements are accurate and complete. Here at SMG, we're committed to helping you streamline this process. Here's what you need to know to close your books for year-end effectively.

1. Review and Reconcile Accounts

Start by reviewing all your accounts to ensure every transaction has been recorded accurately. This includes:

• Cash Accounts: Ensure your bank statements match your cash accounts in your bookkeeping software.

• Accounts Receivable and Payable: Verify that all invoices and bills are recorded and balanced.

• Credit Card Accounts: Reconcile all credit card statements and match them against your expenses.

2. Inventory Check

Conduct a physical inventory count to match your records. This helps in accurately calculating the cost of goods sold and informs financial statements.

3. Review Fixed Assets

Update records of fixed assets, capturing any new purchases or disposals, and calculating the needed depreciation for year-end reporting.

4. Adjust Expenses

Ensure all expenses are recorded, including:

• Accrued Expenses: Expenses incurred but not yet paid.

• Prepaid Expenses: Payments for future periods needing adjustment.

5. Finalize Financial Statements

Generate key financial statements:

• Income Statement

• Balance Sheet

• Cash Flow Statement

Review these for accuracy to give a clear picture of your financial status.

6. Prepare for Taxes

Collect documents needed for tax filings—income statements, expense receipts, and any applicable deduction documentation.

7. Plan Ahead

Use insights from your year-end review to plan financially for the coming year—setting budgets and strategies for growth.

Get Professional Help

Closing your books at the end of the year can be a daunting task. If you need assistance, our experienced team can help you navigate the complexities of year-end bookkeeping, ensuring accuracy and compliance.

Closing your books for the year-end is an essential part of managing your business finances. By following these steps, you can ensure that your financial records are accurate and ready for tax filing and financial planning.