This is the time of the year where we
need to be aware about the importance of closing our
books in the right way. The information that we are going to submit
to the IRS office is fundamental to keep our records and calculate our Income tax correctly
and on time.
Here are the steps that have
to be taken to close your books:
1.
Enter
all the transactions in
the system. All the transactions have to
be entered in a book called the general ledger.
2.
Reconcile the books. Once the GL is ready, other reports such as balance sheet and income
statement or P&L, will be produced and reconciled. Reconciliation means making
sure the numbers show the main financials are backed up.
3.
Review
and check. After the main financials were reviewed,
they need to be approved by the Controller, CFO
or Owner.
4.
Close
the books. Closing the books means the controller locks
the books. In other words, from that moment nobody can touch the
financials anymore except for the adjusting entries, only when is necessary and
approved.
If you need help closing your books, contact VictRi Consultants, we can assist you
with our professional services.
“Your Word is a lamp to my
feet and a light to my path”.
Psalm
119:105
