Bank accounts – Make sure that each account is reconciled to the bank statement through the closing date.

Accounts receivable – Run an Open Invoices report and review with the client for accuracy.

Asset work – We must know details regarding the purchases, sales or other disposals of any assets during the year.

Accounts payable – Run an Unpaid Bills report, and review with the client for accuracy.

Loan work – For each loan, reconcile to the statement from bank or other lender, or to an amortization schedule to verify correct balance in the loan/ interest expense accounts.

Credit card accounts – All accounts must be reconciled through the closing date.

Other liabilities – Tie payroll liabilities to payroll reports based on your knowledge of what has been paid/ what is due. Tie sales tax liability to sales tax reports based on same.

Equity accounts - (for corporations) Retained earnings must roll forward from the prior year tax balance on the Balance Sheet to the current year balance. (In QuickBooks, the Retained Earnings balance on the P&L report should equal the balance on the PY tax return; all current earnings are shown on the line "Net Income".) Tie the Net Income amount to the P&L on an accrual basis.

Zero balances – Opening balance equity, miscellaneous expense, transfer between accounts, or suspense accounts must be zero. Investigate and reclassify any transactions.

Cash transactions – Ask client about cash receipts for petty cash transactions and ensure proper accounting. Ask client about cash/ credit card receipts that were paid for by owners/ shareholders that should be remitted to the company for recording/ reimbursement, and enter these through a draws (if a sole proprietorship)/loan (if a partnership or corporation) account.

Review the P&L, looking for reasonableness and for negative balances. All negative balances should be reviewed to determine if reclassifications are in order. Review the P&L on the cash basis, and again review for reasonableness and for negative balances.

Review the P&L results by month, by class (if applicable), compared to prior periods, etc. to look for trends.

Look for helpful measurements: gross profit percentage, net profit percentage, percentage increase in sales, percentage of administrative expenses based on sales, etc.

Review the balance sheet with prior periods to look for trends. Is cash flow becoming easier/ harder? Are assets increasing, thus infrastructure in place for future increased earnings? Are debts being paid down, thus increasing the current ratio? and others…

Review detailed analyses that will assist in the management of your business: inventory detail reports; profit by job reports; profit by item reports; customer sales pie graph; income vs. expenses bar chart, etc.

TAX PLANNING:

Consider the tax situation of the company, ways to reduce taxes by the end of the year, and what payment of taxes now would be wise.