Year End Checklist for Business Clients

YEAR END CLEANUP Done Not Done N/A JS+A Needs a Report
**Be sure opening Balance Sheet (B/S) matches last year’s B/S and tax return.
Clear the Suspense or Other Expenses account with client and/or JAS help.
Check for double-entered or bad invoices or bills and reverse or delete these BEFORE year end processing.
Don’t delete invoices already reported on sales tax returns; reverse these
Be sure the client files include all payroll and bank and credit card statements.
Record all out of pocket items for the year. Get guidance from client as to unreceipted expenses
Reconcile petty cash
Confirm that all interest, dividends and bank fees have been recorded.
Be sure that crew meals are separated from Meals and Entertainment
Document Business Gifts in Memo field with name of recipient or nature of expenditure
RECONCILIATION Done Not Done N/A JS+A Needs a Report
Leave NO adjustments to balances in Opening Balance Equity
Print Reconciliation for year end.
If bank statement date is NOT same as year end: By hand or on spreadsheet filed with the reconciliation, reconcile to B/S balance at year end
Copy front page of each reconciliation and of each bank statement for JS+A files X
PAYROLL Done Not Done N/A JS+A Needs a Report
Record all current year transactions
Advise payroll service of year end W2 adjustments – keep written backup with client payroll records
AND a copy for JS+A files X
Accrue for SIMPLE or other pension plan contribution
You can accrue even in cash method
Prepare a worksheet for figuring ER pension contribution and copy for JS+A file X
Reconcile payroll liabilities
Figure any adjustments required for Sec 125 or FSA plans, if any
COPY complete final payroll report of the year for JS+A file: this should include X
  • Total amounts paid for each employee for the year
  • Employer Expenses
  • Year End Liability total by tax type.
  • Form 940
  • Forms W2
1099 PROCESSING Done Not Done N/A JS+A Needs a Report
Confirm that Vendor list has current and correct addresses and legal names of 1099 eligible payees
This includes 1099 MISC for business services AND rent paid to non incorporated landlords AND 1099 INT to individuals to whom interest has been paid: shareholder loans qualify
Confirm that 1099 preferences have been updated and that 1099 eligibility is flagged in Vendor files.
Move Other Names that should get 1099s to the Vendor List. You cannot print 1099s for Other Names
Print 1099 report for client and JS+A X
FIXED ASSETS Done Not Done N/A JS+A Needs a Report
Groom the accounts. Reclass to supplies or accessories items under $300 per item
The total cost of a f/a item includes sales tax, shipping and installation if any. If a putative f/a item could be repairs or supplies, reclass it. Software that is upgrade is expensed. Software that is a new, full license is capitalized (which means included in balance sheet) Software that comes bundled on a computer is part of the computer’s cost.
Document each f/a item in the memo field. Make it obvious if several line items correspond to the same f/a item
If fixed assets were sold or disposed of in the current year, proceeds should be posted to Gain/Loss on Disposal of F/A. Memo field should identify the asset(s) sold.
Copy transaction backup for JS+A files X
Expenditures for trademark or patent acquisition or registration should be capitalized to Other Asset accounts
LIABILITIES Done Not Done N/A JS+A Needs a Report
Reconcile the following liabilities – Don’t need to prepare reconciliation reports
  • Client Deposits
  • A/P Insurance
  • Sales Tax
 Dec balance should match Jan coupon
  • Payroll Liabilities
 Y/E balance should match payroll records.
Adjust Y/E Balance of a cash basis taxpayer to reverse off accrued employer taxes if these were not deposited by the client by year end. These are: ER Soc Sec and ER Medi; SUTA and FUTA
Use tax payable
Credit Cards
 Be sure all current year transactions are recorded and reconcile to statement
Shareholder or Partner out of pocket
 Post all current year transactions. Get advice from client as to possible unreceipted transactions for which client should prepare a memo to back up entries on books that may be required.
Loans: If lender provides detail of ending principal balance, reconcile the account.
Likewise if JS+A has developed an amortization schedule
Otherwise confirm that payments have been correctly recorded to the proper liability
Copy Note Payable or other documentation for JS+A file X
LEASED EQUIPMENT AND VEHICLES Done Not Done N/A JS+A Needs a Report
For all new leases of equipment or vehicles in the current year,
Client and JS+A files will need
Cash Invoice information – ie, the cost of the asset before leasing cost X
Copy of Lease paperwork showing terms of lease, size of payments, deposit required, buyout terms if any, etc. X
Be prepared to support analysis by accountant of classification of lease into capital or operating. Lease-related entries need to show which asset they pay for. This is important where one lease covers several things. Be CONSISTENT with prior years
EQUITY Done Not Done N/A JS+A Needs a Report
Document any sale or redemption of stock or ownership of the company in the memo field of entries to Capital Stock, Paid in Capital, Partners’ Capital, etc.
Be sure memo field shows number of shares issued and that the dates are correct
If Draw or Distribution accounts show payment of owner’s taxes, medical, charitable, insurance, retirement, document in the memo field what each transaction was for.
For tax and pension contributions, document for which period (ie, year or quarter), separate Roth, IRA, SEP or SIMPLE contributions
If ownership has changed at all from last year or if this is a new client to JS+A, we will need shareholder or partner list with names, addresses and SSNs for all X
Copy back up documents for JS+A files X
INVENTORY Done Not Done N/A JS+A Needs a Report
If client has inventory, record AJEs for year end totals that should match client’s best records for actual inventory as of year end.
Keep summary of inventory back up for JS&A X
Consider: Food, Beverage, Merchandise, Work in Progress
CASH BASIS ADJUSTMENTS Done Not Done N/A JS+A Needs a Report
If Client uses Qbooks, some of these MAY not be needed. You can use QB cash basis B/S and P&L IF Client has no client deposits or prepaid job costs AND there are no reversing journal entries to A/P or A/R from last year
If the client is cash basis, prepare and record AJEs that reverse:
Client Deposits
A/R
 Offset income and A/R Sales Tax if sales tax appears in the A/R Open Invoices Report for y/e
A/P
 Offset expenses traced from the A/P Unpaid Bills report for year end. Redate A/P items that post credit card or other liability accounts BEFORE preparing the AJE  *DO NOT reverse ending A/P items for fixed assets against the F/A account. Instead, reverse these against a current liabilty: A/P Fixed Assets
Unearned Rent
Prepaid Job Costs
Prepaid Insurance
Prepaid Taxes
*Prepaid Rent stays on the books. So does Prepaid Interest, Pension payable and the EE withholding portion of Payroll Liablities Also Security deposits, credit cards, sales and use tax, notes payable Other reversing entries may be required…Discuss with JAS
INCORPORATION/ORGANIZATION Done Not Done N/A JS+A Needs a Report
If client came into existence this year, JS+A will need copies of Articles of Organization and any other legal paperwork documenting the incorporation or organization, eg: Partnership Agreements, Shareholder Agreements, Stock Option Plans
If client paid Organization Costs, these should be capitalized to an Other Asset, NOT part of Prof Svcs or other expenses
REPORTING Done Not Done N/A JS+A Needs a Report
Prepare the following reports for client AND for JS+A. These are described as QuickBooks reports; if client uses another program, find an analagous report
Profit and Loss full year X
Balance Sheet Jan – Dec Customized to show previous period and dollar difference X
Transaction Detail for:
  • all Fixed Asset accounts
X
  • Equity accounts other than Net Income
X
  • Interest Expense
X
  • Lease-related expenditures
X
  • Tax Deposits paid
X
  • Owner’s pension, health, medical, rent
X
  • Charitable Contributions
X
  • Gifts to Clients
X
*Be sure Memo field is legible and useful. Annotate by hand if needed
A/R Open Invoices as of year end X
A/P Unpaid Bills as of year end X
Both of these with annotations for offsetting accounts or sales tax accrued
Itemized Profit and Loss X
Entire year; fit to one page wide
Detailed Balance Sheet X
Entire year; fit to one page wide
If Client uses another program for inventory, etc, include those reports as well
TAXATION Done Not Done N/A JS+A Needs a Report
JS+A will need copies or to review correspondence and bills from taxing authorities re:
Income
Corporate Excise
Sales/Use Tax
If the client is new to JS+A, we will need copies of last three year’s tax returns WITH ALL PAGES AND SCHEDULES
If client filed an extension for tax returns, JS+A will need
Copies of Extensions
Date and amount of any extension or on account payments
START NEW YEAR Done Not Done N/A JS+A Needs a Report
Set Transaction Closing Date for old year
Prepare copy of file for JS+A on Floppy or Zip Disk. X
DOCUMENT ANY PASSWORD in WRITING in the FILE CLEARLY! X
Backup the data file for client storage- ie, to client hard drive
COMMENTS/TO DO ITEMS Done Not Done N/A JS+A Needs a Report
List pending issues, questions or problems below