Closing the books at the end of the fiscal year can be daunting, but it is extremely important to ensure your records are complete, accurate and in compliance with current reporting standards.
- Ensure all transactions are recorded, including funds received prior to year-end, but deposited after year-end, as well as any uncleared checks and withdrawals.
- Reconcile assets. All bank, investment, credit card and other accounts held at financial institutions.
- Analyze the accounts receivable aging and collectability of long over-due accounts. If necessary, record an allowance for doubtful accounts.
- Update the fixed asset roll forward and ensure additions, disposals and depreciation expense are recorded accurately.
- Review other assets and liabilities, including prepaid expenses, deferred revenue, payroll liabilities, accrued expenses and other accounts to determine potential adjustments.
- Analyze the accounts payable aging, pay any over-due bills and ensure all invoices dated prior to year-end have been recorded.
- Reconcile the student management system to the general ledger to ensure consistency between the two sets of records.
- Reconcile the donor management database to the general ledger to ensure consistency between the two sets of data.
- Analyze restricted fund activity and prepare adjustments, if needed.
- Prepare a variance analysis of actual revenue and expenses in comparison to budget, as well as the prior year for reasonableness. Investigate any significant discrepancies.
- Analyze the general ledger for completeness, accuracy and consistency.
Ideally, these steps would be completed consistently throughout the year, such as monthly or quarterly. This would not only minimize the amount of work needed at year-end, but also provide increased confidence in the financial reports, internal controls and accounting function as a whole.
For additional information and guidance regarding year-end activities, contact the experts at SST today.