Access the accounts payable reports by selecting Reports > Vendors & Payables > Unpaid Bills. While steps one through three above should help you discover most common errors that might be hiding in your QuickBooks file, reviewing accounts payable and receivable will also help by revealing any old, outstanding items that need to be written off or transactions that need to be recorded. Review Accounts Payable and Accounts Receivable. Do the account balances make sense when compared to last year? Are there any negative amounts? Is there a balance in the “Undeposited Funds” account (see above) or “Opening Balance Equity”? If new equipment was purchased (or disposed of) during the year, is the change evident in the Fixed Asset accounts? Are loan balances being reduced as payments are recorded? Be sure to compare account balances to any outside documents you might have, such as bank, credit card, or loan statements, to make sure your QuickBooks balances agree.Ĥ. Next, go down the balance sheet account-by-account. Have any adjusting journal entries created by your CPA last year been posted to your QuickBooks file? Have there been any transactions posted after the year-end that are dated last year? Some common transactions are additional bills or voided checks, but there can be any number of reasons for this problem. If that’s not the case, you’ll need to dig deeper to reconcile the difference. The current year’s balance should be equal to the ending balance reported on last year’s tax return. The first account to review is Retained Earnings. Set the date range to “This Fiscal Year.”
Generate a comparative balance sheet by selecting Reports > Company & Financial > Balance Sheet Prev Year Comparison. Compare the Balance Sheet to Last Year’s. There may be a duplication of income recorded during the year that needs to be addressed.ģ.
If a window pops up showing that you have receipts that are ready to go to the bank, you will need to investigate this account further to find out the status of these items. Start by selecting Banking > Make Deposits. Be sure to pay attention to the “uncleared” transactions (both payments and deposits) and research any stale-dated items that might be duplicated revenue or expense.Ģ. This is a standard good practices activity that should be done on a monthly basis, but is sometimes overlooked in the flurry of year-end activities. Reconcile the Bank and Credit Card Accounts.
What can you do before sending your QuickBooks file to your CPA to make it easier for them to prepare the annual financial statements and tax returns? Here is a brief checklist to simplify the process:ġ. It’s the beginning of December and finalizing the books for the year is already on your mind.
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