Updated at 09/01/2023 - 08:45 am
As the end of the financial year approaches, certain important accounting-related procedures must be performed by the Company in order to close the balances of the accounting books and present the financial statements. These procedures serve as a basis for accountants to account for accounting transactions at the end of the financial year. So what are these procedures and how, EXPERTIS invites you to refer to the details below.
Letter of confirmation of data with the bank #
This is one of the most important procedures to do at the end of the year. Without the reconciliation of bank confirmation letters such as payment account numbers, loan accounts, you cannot guarantee that all financial activities have been fully recorded and in the correct order. incurred. In addition, this reconciliation should be done on a regular basis, preferably monthly rather than only at the end of the year.
Reconciling the data with the bank helps to detect and determine the reason for the difference in the ending balance, if any, of your books and bank statements, and will promptly make the necessary adjustments to the accounts. item not fully accounted for.
Inventory Checking #
If your company has a year-end inventory balance, you should plan to do a year-end tally, condition determination, and end-of-year inventory valuation. From there, adjust the accounting books of the inventory account to match the existing items when inventorying. During the inventory counting process, you must also determine whether or not slow-moving, defective, damaged and obsolete inventory is available to make provision for inventory devaluation in accordance with current regulations.
Cash inventory #
Cash count at the end of the year is the actual counting of cash in balance against the kept records and accounting books. The cash counting is carried out at the end of the year so that the adjustment of differences, if any, is accurately recorded, adjusted in the books and helps enterprises promptly detect losses and frauds related to their assets. company.
Accounts Receivable and Accounts Payable #
The Company must accurately determine the amount owed by customers (accounts receivable) and the amount owed by your Company to suppliers and other parties (liabilities) at the end of the financial year. It is very important to reconcile accounts receivable with customers (which can be done via certified mail) and suppliers at least once a year. The company also needs to make detailed reports to track debts by object, report overdue debts, and monitor debt age. Thereby, observe and evaluate whether or not the balances in the report are to find out unusual balances or not in line with reality.
This is also the time when the Company makes provision for receivables for bad debts, or write off debts based on the evaluation of the company and current regulations. The provision for bad debts is considered an expense of the enterprise.
In addition to ensuring that all increases (purchases) of fixed assets during the year are accurately and completely recorded, it is equally important to recognize sold or liquidated assets. The inventory of fixed assets at the end of the year must be done and compared with the books, in order to ensure the existence of the assets.
Taxes are an important and mandatory part of your business. Failure to promptly declare and pay arising taxes causes the Company to face administrative penalties and interest on late payment. Therefore, the Company needs to review its business activities and the taxes to be paid in accordance with the law at the end of the year and the beginning of the new year.
The issuance of output invoices at the wrong time or input invoices not at the end of this year will affect the periodical recognition in the financial and accounting statements. Therefore, the Company needs to check the input and output invoices at the end of the year to ensure that the invoices are properly and fully issued in accordance with current regulations.
Above are the contents and work procedures that businesses need to pay attention to at the end of the year. If you still have problems, you can contact EXPERTIS's service department for support.