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Closing Out 2018 Books – What You Need to Know


Closing the books

With January just around the corner, all sights are set on 2019 and the amazing strides you are going to make in the coming year.  It’s exciting for sure, but before you dive into your first quarter plans, it’s important that your 2018 books for this year are properly closed so you don’t spend unnecessary time and energy worrying about reporting and tax preparation!

Below are key things you and your accounting team should to do to prepare your business for a smooth year-end.

Reconcile Bank and Liability Accounts

Of course, you always want your financials to be accurate, but it’s not uncommon for some things to be pushed off to the end of the year. To help you and your accounting team tidy up your books, make sure to get any missing documents that will be needed to reconcile your balance sheet accounts.

Missing documents may include:

  • Bank loan statements
  • Credit card statements
  • Bank statements
  • Merchant statements
  • Asset purchase agreements

Of course, it’s best practice to reconcile these accounts each month, which we always do here at Stride, but if that hasn’t happened in your business, now is the time to get those accounts reconciled.

Here are some key things to remember for bank and liability accounts:

  • Interest and principle should always be broken out in loan payments.
  • Large purchases for equipment, cars, etc. should be capitalized and depreciated properly.
  • Ending balances for credit cards, bank accounts, loans, etc. should match the statement balances.

Collect missing W-9s from vendors.

In January, you’ll need to issue 1099’s to any vendors that you paid during the year for services.

As you approach year-end, you’ll want to make sure you have collected a W-9 form from any vendors that will be receiving a 1099.

Keep in mind that you issue a 1099 to the following vendors:

  • Law firms (whether corporations or not)
  • Landlords or anyone you pay rent to
  • Vendors you paid over $600 to for services/labor during the calendar year such as:

-Repair/maintenance companies
-Cleaning services
-Marketing services
-Accountants, CPA’s, lawyers

Vendors that are corporations typically do not need a 1099, unless they are a law firm or were paid rent. Be sure and check out the IRS website for more information on issuing 1099’s.

Review Accounts Payable 

December is a good time to clean up any outstanding issues on your Accounts Payable Aging report. This may include negative balances (which could indicate money due to you), or overdue accounts that may need to be paid.

Reviewing your accounts payable aging for inaccuracies, duplicate entries, or oddities is a great thing to do each month, but it’s also important to do another thorough review at year-end!

Review Accounts Receivable

If you invoice customers, then you’ll want to include a review of your Accounts Receivable Aging as part of your year-end close process.

When reviewing accounts, look for balances that may be inaccurate, negative balances, old balances that may need to be written off and anything else that looks incorrect.

As with all accounts, you’ll want to make sure your accounts receivable balances are clean and accurate!

Review Suspense or Miscellaneous Entries

Throughout the year, it’s not uncommon for your accounting team to book things to the “Suspense” account. Suspense is an account where expenses are booked if the accountant is not sure of the proper account it should go to.

You don’t want anything sitting in a suspense account at year-end.

Set aside time to review anything sitting in your suspense or miscellaneous accounts and help your accounting team record them properly.

Audit Payroll Entries

Payroll is an important area of year-end!

For payroll, hopefully you’re working with the Stride team to take this off your plate, but if not, you’ll want to do the following:

  • Verify that wages, benefits, deductions, commissions, bonuses, etc. are recorded correctly.
  • Assure that paid time off and sick days are recorded properly.
  • Confirm employee and former employee addresses are correct for W-2’s.

Make Year-End Smooth!

The key to a smooth year-end for your business is to keep your books accurate and updated on a monthly basis throughout the year.

We here at Stride pride ourselves in helping our clients do just that.

To see how Stride can help you grow your business, click here!


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