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As the year winds down, getting your books in order is key to starting strong in the new year. A solid year-end accounting cleanup helps you catch mistakes, manage cash flow, and prepare for tax season without last-minute chaos. Here’s a simple checklist to help you stay organized and stress-free. If you need professional help with it, contact an accountant Marina Del Rey.
Reconcile All Accounts
Reconcile All Accounts
Start by reconciling your bank, credit card, and loan accounts. Match every transaction in your books with actual bank statements. This ensures your records are accurate and prevents tax filing errors.
Review Outstanding Invoices and Bills
Check for unpaid customer invoices and pending vendor bills. Send reminders for overdue payments and clear any debts. Accurate receivables and payables help you know your true financial position.
Update Payroll Records
Update Payroll Records
Make sure employee information, salaries, and tax withholdings are up to date. Verify that benefits, bonuses, and year-end adjustments are correctly processed before issuing W-2s or 1099s.
Track and Categorize Expenses
Track and Categorize Expenses
Go through all business expenses and ensure they’re properly categorized. This includes rent, utilities, travel, subscriptions, and supplies. Well-organized expenses make it easier to claim deductions later.
Verify Asset Depreciation
Verify Asset Depreciation
An accountant Marina Del Rey suggests reviewing your fixed assets and calculating depreciation accurately. This impacts your taxable income and overall balance sheet value. Remove any assets that are no longer in use.
Check Inventory Levels
Check Inventory Levels
Perform a physical inventory count if applicable. Compare it with your books to identify shrinkage, spoilage, or discrepancies. Update records to reflect actual inventory on hand.
Evaluate Financial Reports
Evaluate Financial Reports
Run your profit and loss, balance sheet, and cash flow statements. Look for trends in revenue, expenses, and margins. Understanding your numbers now helps you plan smarter for next year.
Backup and Secure Data
Backup and Secure Data
Ensure all your financial data—spreadsheets, receipts, and tax documents—are securely backed up. Use encrypted cloud storage or accounting software with built-in backup protection.
Review Tax Deductions and Credits
Review Tax Deductions and Credits
Work with your CPA to identify eligible deductions such as equipment purchases, home office expenses, or mileage. Planning ahead can significantly reduce your taxable income.
Plan for the New Year
Plan for the New Year
Set realistic financial goals and budgets for the upcoming year. Review your accounting processes and consider automating tasks like invoicing, payroll, or expense tracking to save time.
Final Words
Final Words
A clean year-end close not only simplifies tax filing but also gives you a clearer picture of your business health. Regular maintenance throughout the year ensures smoother operations, fewer surprises, and stronger growth. Don’t hesitate to contact an accountant Marina Del Rey if you need an expert to look into your books.
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