Year end is much easier when the groundwork is done early. Use this checklist to get your accounts and tax position ready before the pressure of deadlines builds.
Get the books in order
- Reconcile every bank and cash account to the ledger, and clear old unreconciled items.
- Review receivables: chase overdue balances and decide whether any need a provision or write-off.
- Review payables: make sure all supplier invoices for the year are recorded.
- Count and value inventory and compare with the records. Investigate differences.
- Update the fixed asset register and check depreciation for additions and disposals.
- Book accruals and prepayments so income and expenses fall in the right year.
Tax and payroll
- Reconcile sales and gross receipts tax returns to the ledger. Differences are a common source of notices.
- Check payroll tax deposits: confirm federal and state payroll taxes were withheld, deposited and reported.
- Collect 1099 information: gather W-9 forms for contractors who may need a 1099, so W-2s and 1099s can go out on time.
- Review owner and related-party balances, loans and their documentation.
Note: Rates, thresholds and deadlines change. Always confirm current requirements with the IRS, the New Mexico Taxation and Revenue Department or your tax advisor.
Documents to keep
- Bank statements, invoices and contracts supporting the year’s transactions
- Payroll tax deposit records and filed returns
- Meeting minutes approving major transactions
- Asset purchase documents and stock count sheets
Plan the timing
Agree a closing timetable with your accountant and auditor at least a month before year end. Decide who provides what, and by when. A clear calendar prevents last-minute scrambles and avoidable late-filing penalties.
This article is for general information only and is not professional advice. Please speak to an advisor about your specific situation.