Ending Your Fiscal Year

Provided By: Danielle Paul

Just when we put away the holiday boxes, it is time to bring down different boxes. These boxes, often called banker’s boxes, do not contain any gifts or fantastic sweets. 

Yes, that’s right, it is time to wrap up 2008 to make way for 2009…Is that easier said than done?

Ending your fiscal year requires a few more steps than taking a trip to Staples. Let’s grab your financial statements and take a look at a few basic things.

• Look at your balance sheet. 
• All Asset Accounts
• Does it make sense?
• Have you taken depreciation on your fixed assets for 2008? 
• Have you added any additional assets that may have been classed as an expense?
• Do you have any outstanding accounts receivable that could be considered bad debt, meaning your client is very unlikely to pay you? 
• Do you have unapplied payments that may need to be corrected?
• Have you taken into account anything you might have prepaid – insurance, rent, security deposits? 
• Do you have any retainers or prepayments on file that need to be adjusted to reflect expenses applied against them?
• Does your cash tie? Go back and spot check a few bank reconciliations against your current data.
• Do you have stale checks on your bank reconciliations that need to be reversed at year end?
• Are your investment accounts marked to market?
• Do you have any notes receivable? Has the interest receivable on those notes been accounted for?
• All Liability Accounts
• Have your accrued any required bonus, pension, or profit sharing payables?
• Are your credit card statements reconciled?
• If you have a payroll that is payable in January, but is for December days of labor, have you accrued that?
• Have you taken into consideration your accounts payable/accrued expenses?  Do you have all of your December costs recorded? Remember your auditor may require an accrual for their fees in their adjustments.
• Do you have any outstanding liabilities or contingent liabilities, such as a litigation or arbitration, that are not reflected in your books?
• Have you accrued you commissions payable correctly?
• Do you have any taxes that need to be accrued?  Payroll?  Federal? State? Special cities, like New York City have their own taxes as well.
• Equity Section
• Have you accounted for all distributions? 
• Check your P&L to make sure nothing was unintentionally classified incorrectly.

• Review your Profit and Loss
• All are your income and expenses classed and accounted for? 
• Consider a prior year comparison.
• Review your T&E expenses, are they thrown into a miscellaneous category and need to be broken out?  Do you have the proper documentation on file to back these charges up?

Additionally, you may want to review your audit adjustments from last year. What can you identify as the largest adjustment?  Have you alleviated the need for that this year? Adjustments that cause any swing to net capital may cause your firm to come under scrutiny from Regulators. This is the New Year, right? Let’s ring it in by giving our auditors a clean set of financials!  If we service your firm as its outsourced FINOP, we will be reviewing you books carefully (we call it the fine tooth comb) with you in the next month to identify and alleviate potential audit adjustments.

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