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End-of-Year Procedures

Many companies operate on a calendar year and their year end is quickly approaching. QuickBooks performs certain year-end adjustments automatically, but other year-end procedures must be performed by your accounting staff.

At year end, QuickBooks automatically “closes” all of your income and expense accounts to an account called Retained Earnings. In this process, QuickBooks zeros out all of the profit and loss accounts so you start the New Year with a zero net income.

Your bookkeeper will need to perform the following year-end procedures (depending upon your company’s policies):

1. Check that all the accountants prior year adjusting entries are recorded.
2. First, perform all of the normal month-end procedures for the final month of your year. (Reconcile cash and credit card accounts, tie-in loan accounts, adjust prepaid accounts, etc.).
3. Next, run all necessary reports for the year and verify that everything appears accurate. Make all necessary adjustments and journal entries and then rerun the reports. Run A/R and A/P aging reports to make sure that all receivables and payables are valid.
4. Process 1099’s for vendors, which must be sent no later then January 31st. QuickBooks 1099 Wizard (Under Vendors a Print/E-file 1099’s a 1099 Wizard) can guide you through this process with it’s step-by-step instructions.
5. Back up your data file, following your company’s data management guidelines, and keep a permanent copy in a safe place.
6. Set the closing date in QuickBooks to the last day of the period you are closing and do not release the password to anyone who is not authorized to make prior period adjustments.