“He’s making a list, and checking it twice…”

Have we got you thinking about that “jolly old elf” who shows up every December? 

While we do recommend being on your best behavior in anticipation of his arrival, we’re not talking about Santa just yet. 

Business owners, it’s the 4th quarter, and that means our fiscal year is coming quickly to its close. Are you ready to race across the finish line of another great year for your company, or does the idea of retrieving receipts, reconciling accounts, and reviewing the books make your feet suddenly feel like lead? 

As it turns out, “making a list and checking it twice” isn’t just a good idea for St. Nicholas; it’s the perfect strategy for completing your 4th quarter accounting responsibilities.  Your local accountants at Hayes and Associates can show you how to do it.


What is Year-end accounting?

Year-end accounting may alternately be referred to as “year-end closing”. During this time, all financial loose ends are tied up and differences in statements and account records are reconciled and balanced. 


Making a 4th Quarter Task List

Organization is your key to success in closing out the year. According to Klippa, professional accountants spend approximately twenty-five days completing their year-end tasks, so make sure you set aside plenty of time to focus on the work before you. Remember to utilize all the resources you have on hand, such as accounting software and hard-working colleagues, so you don’t bear the burden alone.


Make a Schedule

Prepare a company-specific list of tasks that must be completed to close out the 4th quarter. Assign due dates to each of them, and if there are no external deadlines to meet, go ahead and assign completion goals based on a logical sequencing of events. 

Communicate and delegate tasks to team members and key players in this process. Set reminders and check-ins as deadlines approach.


TIP: Block off ample chunks of time for year-end tasks, and work at them when you’re at your best. Tacking on an hour or two for accounting at the end of a busy day is more likely to result in errors and inefficiency.


Gather Records

To reconcile company finances, you’ll need all the statements and transaction records for all accounts. Be sure to gather bank and credit card statements, receipts, invoices, inventory counts, tax returns from the previous year, loan account data, payroll records, and any other documentation that relates to the finances of your company.


TIP: If these records are not digitized, we strongly recommend scanning and digitizing all of them. Not only will you have a safe backup for all of your documentation, but it will be much easier to organize and access your records if they are all online.


4th Quarter

Check the Numbers

With all of the data before you, begin to critically and carefully evaluate the records for accuracy and completion.

  • Compare bank and credit card statements with your books. Note discrepancies and any gaps in documentation. 
  • Compare invoices to payments received. Make note of any outstanding balances. 
  • Look at your bills. Are there unpaid debts? 
  • Note gaps in the books. Are there holes in the records, such as missing receipts, unaccounted-for expenses, or unresolved purchase orders?  

Wherever you find a discrepancy or loose ends, work systematically through them one by one until they are reconciled. 

  • If you feel there is an error, make the necessary inquiries. 
  • Pay the current balances you owe for materials, services, or loans. 
  • Get in touch with customers who have outstanding balances. Encourage them to pay their debts as quickly as possible.


TIP: If you have clients who, for some reason, are unable to pay their debts in full at this time, you may want to arrange a payment plan that will at least secure part of what you’re owed now with the rest promised later. As far as is possible, however, seek to complete every transaction before the end of the 4th quarter.


Reconcile Cash Accounts

Once you’ve addressed the statements, invoices, and receipts, turn your attention to the cash accounts. Assess the value of all company assets, noting losses that must be accounted for. Reconcile discrepancies in the company’s cash flow.


Checking the List Twice

Human error is unavoidable, so no matter how organized and detail-oriented you are, check every number for accuracy! A single mistake can throw off your numbers entirely and give you the wrong impression of your company’s health. Plus, the real possibility of an audit, which could come at any time, emphasizes the urgency of 100% accuracy. 


TIP: Ideally, a second set of eyes examining the books with you can help to reduce the likelihood of errors.


And To All a Good Night

Planning and organization can give you peace of mind (and a good night’s sleep) as you close out your books for the year. Regardless of how the 4th quarter processes have gone for you this year, learn from your experiences, and let them inform the way you run your business next year.

When the books are closed and the tasks are done, take some time to reflect on and evaluate the health of your company. 

  • Did you meet your income goals? Growth goals? 
  • Where do you hope to be in a year’s time, and what steps need to take to get you there?
  • What will improve your efficiency in record-keeping?
  • What parts of your business need to be streamlined?
  • What resources are available to help your business run better?
  • How is your business performing in the short term (this year versus last) and in the long term (over the last 5 or 10 years and beyond)?

With the resulting clarity as to where you are and where you would like to see your company go, the new year is the perfect time to set SMART goals (specific, measurable, achievable, relevant, and time-bound) that will help your company thrive. Celebrate your successes and make the changes that will improve your processes and profitability in the year to come. 

Don’t forget to share in the celebration and goal setting with your colleagues and employees! Share with them the changes you’ll be making and the ways they will help improve the company’s health and their work experience. 


You Don’t Have to Do This Alone

Managing your own accounting while trying to run all the other facets of your business is a noble- but sometimes overwhelming- goal. Remember that at Hayes, we offer a full line of accounting services, including consultation, bookkeeping services, tax preparation, and more. We’d love to help your company finish the 4th quarter strong and help guide you on the path to success in the year to come. Give us a call today.