Tax & Financial News

December is the perfect time to take steps to make sure your QuickBooks file is cleaned up for year-end and ready for 2023. The following tasks will ensure that you have accounted properly for 2022 revenue and expenses and will help get your books ready for taxes.

Taking these steps will accomplish the following:

• Ensure that you’ve processed every 2022 transaction (or that you know why you can’t).
  
• Give you a sense of closure, knowing that you’ve dealt with all your 2022 financial data.
  
• Allow you to start your 2023 QuickBooks activities with as clean a slate as possible.

General Year-End To-Do List:

• Reconcile all bank and credit card accounts. If you have uncleared transactions older than six months, verify that they are actual transactions and not duplicates. Correct any errors and/or write off old, uncleared transactions.
  
• Prepare copies of year-end statements to send to your accountant.
  
• Reconcile loan balances to match your bank’s year-end balance. Prepare copies of the year-end loan statements to send to your accountant.
  
• Review accounts payable for unapplied credits. Apply that credit to current bills.
  
• Review receivables for unapplied credits. Write off outstanding receivables that are considered to be uncollectible.
  
• Review sales and use tax records to prepare for annual filings, if applicable.
  
• Compile a list of equipment, vehicles or fixtures acquired or disposed of during the year. Verify major purchases (over $2,500) are posted as fixed assets and not expensed.
  
• Take a physical inventory, if applicable, and adjust to actual.
  
• Review 1099 vendors – verify information is correct; process 1096 and 1099 forms, or send information to our firm to prepare before the January 31st filing deadline.

Payroll Year-End To-Do List:

• Review employee records – verify social security numbers and addresses are correct.
  
• Prepare year-end returns – 941, 940, state withholding reconciliations, and unemployment reports – prior to processing W-2 forms to verify payroll information is correct.
  
• Reconcile all four quarters of Form 941 to Form W-3.
  
• Process W-2 and W-3 forms.
  
• Before processing your first payroll in the new year:
  1. Update your tax tables by running “Payroll Update.”
  2. Update unemployment rate changes, if any, that you received from your state’s Unemployment Commission.

Account For All Of Your Income

You certainly want to have received all of the money owed to you by December 31st, if at all possible. Run a report to see which customers have outstanding, overdue balances. Open the Reports menu and select Customers & Receivables and A/R Aging Summary.

The first column here will read Current. You don’t have to worry about these customers. It’s the next four columns that will require follow-up calls or contact to collect the balance due.

If your report contains only a sea of zeroes in those four columns, everyone is paid up. If not, you can send statements to anyone who is at least one day past due to remind them of what they owe.

Open the Customers menu and select Create Statements.

Make sure the Statement Date is correct since QuickBooks will use this to calculate aging. Then you can either enter a specific Statement Period or request All open transactions as of Statement Date. If you choose the latter, you’ll most likely want to limit the statements to customers whose payments are overdue. So, you’d click in the box in front of “Include only transactions over [your number here] days past due date.”

Below these options, you’ll be able to indicate which customers should receive statements. The most common choice is All Customers (who fall into the group you just defined), but you can also send to one or multiple customers. QuickBooks will display a list if you select one of these. The right pane of this window contains several additional options that you can check or uncheck. When you’re satisfied, you can Preview, Print, or E-mail the statements.

Pay Outstanding Bills

You should also try to settle your Accounts Payable before the end of the year. Open the Reports menu and select Vendors & Payables and A/P Aging Summary. Look for dollar amounts in the columns that show aging beyond the first column. You can also run the Unpaid Bills Detail report and look at the Aging column.

Look in the aging column of this report to see which bills are past due and by how many days.

Note: QuickBooks has multiple Preferences that relate to reports and aging. We can go over these with you if you haven’t explored them.

Our Client Support Services team is always happy to assist you with any questions. Please contact our Leesburg or Warrenton office to make an appointment.