How to Close the Books and Finalize Year-End Financials for 2022
As a business owner or office manager, you’re responsible for the business’s financial integrity. To that end, a helpful guide on how to close the books and complete year-end financials for 2022 would probably come in handy. Whether you’re doing it yourself or working with an accountant, this article will help ensure that your finances are accurate and up-to-date. Follow these steps from Bayou Bookkeeping & Tax Services, and you’ll be ready to start the new year on solid footing.
Make a Plan
Closing the books is a crucial year-end practice in accounting; it creates clean, separate records of each new fiscal year. Before starting to close the books, you must complete several tasks. First, reconcile fund balances and ensure account accuracy. Then, record any accruals for expenses or revenues incurred during the final days of the fiscal year. Following this, make any necessary adjusting entries. Finally, review individual transactions to ensure accuracy in all your financial records before closing the books.
Complete Financial Reporting
An essential part of financial reporting is understanding the types of financial statements used. The main categories are balance sheets, income statements, cash flow statements, and retained earnings. Balance sheets provide a summary of assets and liabilities at a given time, such as the end of the month or quarter. Income statements measure profits generated during a specific period by analyzing revenues and expenses over that period. Cash flow statements report cash transactions over a certain period, while retained earnings statements track net income allocated to shareholders over multiple periods.
Close Out Accounts
Year-end is an important season for business and accounting professionals. It’s essential to ensure that all accounts are accurately closed out each year to maintain the organization’s financial health. Start by preparing a list of accounts used during the fiscal year. Once the list has been prepared, compare it to the previous year’s account information to determine which ones need to be revisited or updated. After reconciling any discrepancies between data from both years, it’s time to move on with the closing processes.
Review Tax Law Changes
As year-end approaches, business owners need to be aware of any changes in tax laws that could impact their operations. Make sure you set aside enough time to analyze all governmental changes. Keeping up with the latest financial guidelines can also increase efficiency in staying compliant within your industry. Being aware of any changes in taxation can help your business save money in an uncertain economic climate.
Leverage Accounting Services
When it comes to handling your business’ financials, accuracy and timeliness are critical. Using an accounting service to record and audit your books can keep you on the right track and ensure everything is done correctly at year-end. Our professionals are dedicated to reviewing the data given, finding discrepancies, and ensuring accuracy. We even offer subscription plans.
Finalize Employee Records
At fiscal year-end, it’s essential to take stock of where your employee records stand. To finalize your employee records, you’ll need to confirm employee demographics—including names, addresses, and contact information—are up-to-date, as well as ensure that benefits, payroll, taxes, and all other necessary documents are complete. Then ensure everything is appropriately stored in a secure system.
Now that you know how to close the books on your business, it’s time to start. Bayou Bookkeeping can help you with all of your bookkeeping needs in Walker. We will work with you to ensure everything is handled correctly and on time. Call us today at (225) 442-1137 to request a consultation.