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.
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