It's time to close the books on 2020, but before you close the year in QuickBooks, you need to ensure a few things are done.
Make sure you:
- Reconcile and Review Bank and Credit Card Statements – once you complete the reconciliations, ensure the ending balances agree with those found on the balance sheet and general ledger. You may have to consider uncleared transactions.
- Billings – make sure you have billed for all of your 2020 work.
- Check Accounts Receivables – do you have uncollectible accounts to write-off as bad debt?
- Ensure Accuracy of Accounts Payable – are there duplicates or uncategorized expenses?
- Inventory – if you have it, make sure you have a count as of December 31st.
- Payroll Liabilities - if you use a clearing account, ensure it has a zero balance. Check to ensure that your payroll tax deposits match the quarterly return.
- Check your balance sheet and profit & loss - does everything make sense? Are there gaps in expenses? Do you have uncategorized income?
- Record Depreciation
Don’t forget to close the year in QuickBooks. Once you have made all the necessary changes, you don’t want to make a mistake and change anything in a prior year. Closing your books will ensure you don’t make that mistake.
Procedure to close the books in QuickBooks Online:
Go to Settings, select “Advanced” and turn on “Close the books.”
Visit us at www.budgetease.biz to see how we can help ensure the accuracy of your bookkeeping prior to preparing your taxes.
