The end of the year is here, and it’s time to close your books! But don’t stress—wrapping up your finances in QuickBooks Online doesn’t have to be overwhelming. With a solid plan, you can confidently finalize your books, manage your accounts, and prepare for a successful new year. Here are 10 essential tips to help you get everything in order before the clock strikes midnight on December 31st!
1. Confirm Your Fiscal Year and Accounting Method
Make sure your QuickBooks Online (QBO) settings align with your business’s fiscal year and accounting method (Cash or Accrual). This ensures your financial reports and tax filings are accurate.
· Navigate to Gear > Account and Settings > Advanced
· Check your Financial Year Start Month
· Confirm your Accounting Method to match prior tax returns or consult your tax accountant.
2. Review Customer Account Balances & Send Statements
Outstanding balances impact cash flow. Send reminders to clients with unpaid invoices:
· Go to Reports and run the Accounts Receivable Aging Summary
· Identify overdue accounts and send year-end statements as friendly reminders.
3. Clear Any Outstanding Deposits
Pending deposits in the Undeposited Funds account won’t be recorded as income. To avoid discrepancies:
· Go to Bank Deposits in QBO
· Ensure all received payments are properly recorded.
4. Review Vendor Balances & Pay Outstanding Bills
Stay on top of liabilities and ensure accurate year-end reporting:
· Pull up Accounts Payable Aging Summary in Reports
· Pay any remaining bills or record payments made by check.
5. Reconcile All Accounts
Reconciliation ensures accuracy and prevents discrepancies:
· Use the Reconcile Tool to match transactions with bank and credit card statements.
· Address any mismatched transactions to keep your books error-free.
6. Run Year-End Financial Reports
A clear financial picture helps you make informed business decisions:
· Balance Sheet (to check assets, liabilities, and equity)
· Profit & Loss Statement (to review income and expenses)
7. Distribute 1099s to Contractors
If you paid independent contractors more than $600, you must send them a 1099 form:
· Use Profit and Loss by Account to identify 1099-eligible vendors.
· Ensure their information is correctly recorded in QBO.
8. Reclassify Transactions
Misclassified expenses or income can distort financial reports:
· Use the Reclassify Transactions Tool to correct any misallocated entries.
· Ensure all transactions are categorized correctly before finalizing your books.
9. Close Your Books
Prevent accidental changes to past transactions:
· Go to Gear > Account and Settings > Advanced
· Enable Close the Books and set a password for added security.
10. Prep for Taxes
Make tax season easy with QuickBooks Online’s built-in tax tools:
· Use Prep for Taxes in QBO Accountant to gather required tax documents.
· Ensure everything is organized before filing your return.
Ready for a Hassle-Free Year-End? Let Us Help!
Closing your books doesn’t have to be stressful. At ISTAXPro Accounting Firm, we ensure your finances are in perfect shape, so you can focus on growing your business.
Contact us today for expert accounting support and start the new year with confidence!
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