For the QuickBooks (QB) bookkeeper, a handful of end-of-year tips, most of which should be done before you send your books to tax:

1. Reconcile all your bank, credit card, loan, and line of credit accounts — The cleared balance on your QB “bank rec” should match the same number on the statement. Quality control tip: print the detailed version of the reconciliation report each time, and scan for uncleared transactions that should have cleared by now. Research and resolve.
2. Tie out payroll — Your company’s P&L for the year should match your payroll service’s end of year report with respect to salaries and wages, and payroll taxes, too. Investigate until all variances – and there are some common, valid ones – are known.
3. Tie out revenue — Make sure you have a copy of every customer invoice, and that they add up to the year’s revenues. This simple act benefits you in many ways: helps get the books ready for tax; locates A/R and filing system errors; serves as a general financial control; and strengthens your audit defense should the need arise.
4. Look for transactions out of date range — Pull a transaction list by date = all; look for December 2006 transactions – a common problem when we start a new year, because QB defaults to the current year if you don’t enter one.
5. Proof QB’s cash basis balance sheet — QB doesn’t always accurately convert from accrual to cash basis. We learned a lot about this topic from The Sleeter Group, which publishes a free online guide.They sell reference manuals, too, if you’re interested in more advanced learning*.
6. Advance the closing date —Once you send your books to your CPA, advance the closing date, set a special password, and don’t make any changes to the books without consulting your CPA and/or QuickBooks advisor. This can save you hundreds, sometimes thousands of dollars, in professional fees, because when people create tax returns based on your books, amending those returns if the data change is very expensive.

* To retain our unbiased, independent perspective, Small Business Logic Inc. receives no financial benefit from any third party resources that we might mention.