At the start of the year, you have a brand new chance to improve the financial status of your business. Taking some simple steps now can make a big difference in improving your business throughout the year. Follow these steps to start your accounting year right!
Back Up Your Data
How often do you back up your data? You really should back up your data on a regular basis, and then check to be sure the backup was successful. The New Year is a great time to start implementing this process and making it part of your ongoing procedures.
Make Adjusting Entries
Make adjusting entries to balance inventory and payroll liabilities. Check all accounts payable and accounts receivable reports to be sure the amounts are accurate. Also, write off any bad debts.
Reconcile Bank and Loan Accounts
Reconcile all cash, loans, credit lines and credit card accounts with their statements. Compare the reconciliation reports to your balance sheet to be sure the amounts match and to ensure you have an accurate balance sheet. By not reconciling, you could end up with a payment due that you had not planned for.
Print Year-end Financial Statements
Print the year-end financial statements including an income statement, balance sheet and a general ledger report.
Review Customer Aging Report
Review your Customer aging report; check to see if any balances need to be written off or turned into collections. Also, refund old overpayments and deposits.
Take Fixed Asset Inventory
Verify that the fixed assets on your books are what you still have and vice versa. This is a step that most businesses forget to take, and once they do, they find out there are things on the books they haven’t had for years.
Verify Coordinating Sub-ledger Accounts
Verify that your inventory, accounts payable and accounts receivable balances match your coordinating sub-ledger. For example, be sure the balance on the accounts payable account in General Ledger matches the balance on the accounts payable aging report.
Create a New Budget
A new budget should be created well before the New Year starts. However, the start of the year is a good time to begin actually following the budget. Start the year right by making it a habit of paying attention to your budget and where your business stands. You are more apt to make money if you have goals/plans in place, which can all be planned out and recorded in your budget.
Create an Actionable Customer List
Create a list of customers who did NOT purchase from you in 2011, and put an action plan in place to get those customers BACK.