There is always more to do at year end than running the final close report.

You may have missed a supplier’s invoice or a customer’s payment may be applied to the wrong invoice. Just one incorrect month in an expense can throw your yearly result out.

Close your books by going through your records step by step, correct any variances and make sure you have documentation for all changes.

What you’ll learn:

• Plan the Close Before You Start
• Get Your Invoice Records in Order
• Reconcile the Money Coming In and Going Out
• Check Stock, Assets and Year-End Adjustments
• Bring Tax and Payroll Figures Together
• Sign Off the Accounts and Store the Records
• Wrapping It Up

Plan the Close Before You Start

Find out what your financial year end is and when accounts need to be completed. They could be different dates.

Create a schedule for documents, final journal entries, account reconciliation and approvals. Have some slack time to ask your accountant questions.

How long does it take? According to APQC’s benchmark across industries the median is 18 days. This is the cycle time from trial balance to finished consolidated financial statements. Depending on how your business works, year end could take longer or shorter.

Have different employees responsible for tasks. Sales employees could collect customer invoices, your bookkeeper can ensure account balances are correct and your accountant can identify journal entries.

Make a shared list of what documents are outstanding and any open questions. Assign an owner and next action. Have an agreed final date to do standard entries so there aren’t any updates while others are working on year end figures.

Get Your Invoice Records in Order

Ensure all customer invoices, credit notes, cancellations and payments are accounted for in your sales ledger.

Pull up all customer invoices for the year and ensure the date, customer, total and itemised descriptions of goods or services are accurate. Make sure you haven’t deleted any cancelled invoices, ensure their status is reflected in your ledger.

Using an invoice number sequence will help you identify any gaps. Using a system of 2026-0001, 2026-0002, 2026-0003 will let you know if there are numbers missing or used twice. Identify why there are gaps, if you have multiple people invoicing check their sequence isn’t clashing with another set of invoice numbers. Having one invoice number registry will help you trace all your income.

Make sure all your invoices follow the same format if you’re hand writing invoices have a set format you always follow. These invoice templates such as ones from Prime Software can help, they have room to put your customer, invoice items and payment information in a neat order. However, they won’t help you create a registry of used invoice numbers.

Add which invoices have been paid, open or disputed, keep a note of any credit notes as well.

Look for duplicate invoices or any customer invoices that haven’t been entered into your sales ledger, fix these variances now while you have the documents in hand.

Reconcile the Money Coming In and Going Out

Check your invoice records against actual cash flow.

Ensure each business bank statement matches the corresponding ledger account at the year end date. If you have business debit cards, saving accounts or other payment services receiving customer funds, make sure those are included as well. Go through and tick off each entry, look at what remains to see what variances you have.

Maybe a payment was just initiated and didn’t hit the account before year end. There could be missing bank charges, double payments or your payment services may have deposited less money than the customer paid due to service fees. Make sure you’ve matched the entire sale and deducted any fees, not just posted a lower amount from your bank statement to your sales.

Now that your bank statement matches, you can check how much money is owed to you and how much you owe.

• Customers: Check your aged debtors list against any open invoices, check if any are in dispute or unlikely to pay.
• Suppliers: Compare your bills with your purchases and reconcile supplier statements. Make sure if you received any inventory or services before year-end, that you have the bill for that as well, even if it was dated after year end.

Year end income/expense could be determined by more than when you received/paid an invoice, consult with your accountant for how to account for any ambiguous transactions based on your accounting standards.

Check Stock, Assets and Year-End Adjustments

Year-end journal entries include accounts that weren’t cash, like inventory, assets and prepayments.

If you carry inventory, you want to compare your physical inventory with your recorded inventory. Check for broken, lost or slow selling stock. Check what you can sell the remaining inventory for, don’t assume everything is good.

Look over any additions/removals to your fixed assets, calculate depreciation based on your accounting method and compare to your fixed asset account. Cross reference what you have in your fixed asset list to purchases and removals, if you sold an item months ago it’s probably no longer an active fixed asset.

Lastly, you’ll want to pull your adjustments:

• Any prepayment made towards next year’s financial year (like insurance)
• Accrued expenses, for things you already received the goods/services for
• Deposit from customer for work not yet completed
• Unbilled work you performed

Your accountant should help you prepare these at the end of the year, according to the Swiss Federal Tax Administration you should have an end of year list of: inventory, open customer balances, open supplier balances, unfinished and unbilled work and services and pre-payments.

Document your reasoning and have documentation for each of these entries.

Bring Tax and Payroll Figures Together

Once you’ve corrected your ledger, compare any tax and payroll related info with the rest of your accounts.

Swiss businesses registered for VAT should look at your taxable sales/purchases and make sure they match with your VAT returns. If you made any changes to invoices, gave credit notes or had other items that aren’t obvious, check those against your VAT return.

The SME Portal gives some insight as to what should be included on an invoice, like who it is being sold to, what was bought and if it’s subject to VAT. Numbering your invoices makes it easy to pull the information, but won’t help if your invoice is not correct.

Payroll should also be checked, ensure you paid the correct salaries, withholdings, taxes and reimbursed employees correctly. See if there is any money due to your employees at the end of the year, maybe vacation pay, bonuses etc that you need to record according to your laws and company policies.

Create a list of any pending reports, payments, changes or notices you need to submit. Add what they are due by and who is responsible for completing them.

Sign Off the Accounts and Store the Records

After making all journal entries, generate a new trial balance and compare your financial statements. Ensure that this year’s P&L numbers are reasonable, look at past months if you think something looks off and your balance sheet is in agreement with your reconciled accounts.

If you feel any income, expense or balance is out of line, dig deeper before you approve your financials. Comparing monthly totals to prior months can uncover discrepancies that you wouldn’t catch looking at your full year number alone. Use your documentation to back up corrections, don’t trust someone telling you what the journal entry should be, go look at your source document.

Save all of your year end documentation in a neat folder, if your software allows locking your accounts from any further changes but have a way to make corrections if you find an issue.

Filing is often overlooked when doing your books, the Swiss Code of Obligations dictates most business entities to keep their books for ten years. If you are storing your books electronically make sure you can access them and fulfill the necessary criteria to retain electronic records. Having them in a folder somewhere isn’t enough, you want to be able to pull them up and verify their information.

Ensure that your year end financials tell a story to anyone who didn’t help close your books.

Wrapping It Up

Doing your year end bookkeeping can be simple, if you break it down into these steps. Collect all of your invoice documents, check your accounts, correct any journal entries and pull your year end information to ensure your financial statements are correct.

Use this checklist during your regular month closing procedures, catch discrepancies early and your year end may make year-end less stressful.