Yearly Bookkeeping Closings Checklist

Depreciation and Amortization involves accounting for the decrease in value of long-lived assets over time. This process is necessary to match the cost of these assets with their related revenues, providing a more accurate financial picture. The depreciation and amortization expense are calculated by subtracting the residual value from the asset's initial cost or acquisition price. The result is then allocated over the useful life of the asset using a straight-line method or an accelerated method such as double declining balance. This process helps to accurately reflect the true economic costs of owning these assets, allowing for better financial planning and decision-making.

This process step involves the receipt of invoices from vendors for goods or services provided and the recording of accrued expenses. The accounts payable function is responsible for verifying the accuracy of these invoices and ensuring that all required documentation is complete and on file. This may include purchase orders, delivery receipts, and other supporting documents. Once verified, the invoices are recorded in the company's accounting system, with the amount due to each vendor tracked separately. Accrued expenses, which represent the cost of services received but not yet invoiced, are also accounted for and added to the total accounts payable figure, providing a complete picture of the company's outstanding financial obligations. This process enables the accurate tracking and timely payment of invoices owed to vendors and suppliers.

This process step involves the management of accounts receivable and prepaid expenses. It begins with the initial receipt of customer payments for services rendered or goods sold, which are then recorded in the accounts receivable ledger. As payments are received, they are applied to outstanding invoices, reducing the balance owed by customers. Prepaid expenses are also recorded and accounted for, representing amounts paid in advance for future goods or services. Periodically, the accounts receivable and prepaid expense ledgers are reviewed and updated to ensure accuracy and compliance with accounting standards. This step is critical in maintaining a healthy cash flow and accurate financial reporting, and its outcomes directly impact the company's liquidity position and overall financial health.

Capital Leases is a process step that involves evaluating lease agreements to determine if they qualify as capital leases under accounting standards. This step assesses whether a lessee has taken on substantial risks associated with ownership and whether the lease term is greater than 75% of the asset's useful life. If these conditions are met, the lessee must recognize the leased asset as its own on the balance sheet, depreciate it over its useful life, and report interest expense on the capital lease obligation. This process step helps ensure accurate financial reporting by distinguishing between operating leases and capital leases. The outcome of this assessment will determine how the leased asset is accounted for in the company's financial statements.

This process step involves updating financial records to reflect tax-related changes. The Tax Provisions section of the system is used to ensure compliance with relevant tax laws and regulations. Here, accountants and bookkeepers input data regarding tax rates, exemptions, and deductions applicable to specific clients or companies. This information is then used to accurately calculate tax liabilities and make timely payments. The provision also includes details about tax returns, notices, and any subsequent adjustments. It is essential for maintaining transparency and meeting fiscal obligations. Relevant documentation and records are stored within this section, providing easy access for auditing purposes.

The Employee Benefits process step involves reviewing and administering various benefits offered to employees. This includes but is not limited to health insurance, life insurance, disability insurance, retirement plans such as 401(k), and paid time off policies like vacation days and sick leave. The employee benefits team reviews enrollment applications, updates benefit elections, and confirms eligibility for company-sponsored benefits. Additionally, this process step ensures compliance with relevant employment laws and regulations, ensuring that all benefits provided are fair, equitable, and meet the minimum requirements set by applicable laws. Accurate and timely administration of employee benefits is crucial to maintaining a positive work environment, promoting job satisfaction, and supporting overall well-being of employees

The Pension and Postretirement Benefit Plans process involves calculating and recording employer contributions to various pension and postretirement benefit plans. This includes defined benefit pension plans, which provide a certain amount of benefits per year based on factors such as salary history and years of service. Additionally, it involves calculating and reporting the cost of providing postretirement benefits to employees, including life insurance, disability income protection, and other forms of supplemental coverage. The process also entails accounting for any changes in actuarial assumptions or plan participation rates that may affect benefit costs. Accurate calculations are crucial to ensure compliance with relevant laws and regulations governing these types of plans.

This process step involves the establishment of a stock-based compensation plan by the organization. It requires the creation of a program that awards employees or other stakeholders with company stock or equity in lieu of monetary payment for their work or services provided. The objective is to incentivize and motivate recipients through potential long-term financial gains tied to the performance and growth of the business. The process includes setting up guidelines for eligibility, vesting schedules, and any applicable tax implications. It also involves communicating the program's terms and benefits to employees to ensure understanding and alignment with company goals. Additionally, it requires ongoing administration and monitoring to maintain compliance and fairness within the organization.

This process step involves capturing and recording income and expenses that are not directly related to the core business operations. It includes revenue from sources such as investments, grants, donations, and any other non-operating income streams. On the expense side, it covers costs like interest payments on loans, taxes, insurance premiums, and any other non-operational expenses. The purpose of this step is to accurately account for these miscellaneous items in order to provide a comprehensive financial picture. This information is essential for making informed decisions regarding budgeting, forecasting, and overall business strategy.

This reconciliation process involves ensuring that the total assets presented in the balance sheet are equal to the equity reported in the statement of stockholders' equity. The objective is to verify that the accounting equation A = SE + L remains balanced at the end of each reporting period. To accomplish this, adjustments and reversals related to accounts such as treasury stock and dividends are made during the reconciliation process, resulting in an accurate calculation of net income or loss and comprehensive income or loss.

This process step involves reconciling the total liabilities and stockholders' equity as per the balance sheet with the respective components that appear in the statement of cash flows. The objective is to ensure that the net increase or decrease in liabilities and equity is correctly reflected in the operating, investing, financing sections of the cash flow statement. This involves matching the non-cash changes such as depreciation, amortization, and provisions for losses against corresponding inflows or outflows of cash from these areas. Additionally, adjustments are made to reflect changes due to issuance or repayment of long-term debt, preferred stock, and common stock.

The Certification process step involves validating and verifying that all necessary documents and requirements are in place to obtain certification for a product or service. This may include conducting audits, inspections, and tests to ensure compliance with relevant standards and regulations. A team of experts reviews the submitted materials, verifies their accuracy, and ensures they meet the required criteria. Any discrepancies or issues identified during this process are addressed and rectified before proceeding further. Upon successful completion of the certification process, a certificate is issued, confirming that the product or service meets the specified standards, and it is now eligible for use in various applications or industries. This step helps build trust with customers and stakeholders by demonstrating a commitment to quality and adherence to established guidelines.