1. Bank Reconciliation:
- Examine and reconcile bank statements.
- Confirm outstanding checks and deposits.
2. Journal Entries:
- Record necessary adjustments for accruals and deferrals.
- Update depreciation for fixed assets.
- Adjust prepaid expenses and unearned revenue.
3. Accounts Receivable:
- Reconcile accounts receivable balances.
- Verify the allowance for doubtful accounts.
4. Accounts Payable:
- Reconcile accounts payable balances.
- Ensure the accuracy of recorded expenses.
5. Payroll:
- Review payroll transactions for correctness.
- Verify tax withholdings and other deductions.
6. Fixed Assets:
- Update the fixed asset register.
- Record any disposals or additions to fixed assets.
7. Inventory:
- Compare physical inventory with recorded amounts.
- Adjust inventory levels as necessary.
8. Liabilities:
- Ensure all liabilities are accurately recorded.
- Reconcile outstanding loans or credit balances.
9. Expense Review:
- Review all expenses for accuracy and proper classification.
- Confirm that all incurred expenses are documented.
10. Revenue Recognition:
- Ensure proper recognition of revenue.
- Review deferred revenue and recognize it as appropriate.
11. Financial Statements:
- Prepare financial statements (Income Statement, Balance Sheet, Cash Flow Statement).
12. Analysis:
- Analyze financial statements for trends and discrepancies.
- Conduct variance analysis against budget or forecast.
13. Closing Entries:
- Close temporary accounts (e.g., revenue, expenses) to retained earnings at year-end.
14. Documentation:
- Ensure all supporting documents are filed correctly.
- Maintain a clear audit trail for all transactions.
15. Backup and Security:
- Backup financial data and store it securely.
- Review access controls and restrict access as necessary.
16. Final Review:
- Conduct a comprehensive review of the entire closing process.
- Verify that all required steps have been completed correctly.
17. Reporting:
- Distribute financial reports to all relevant stakeholders.
- Respond to any questions or concerns raised.
18. Compliance:
- Ensure adherence to accounting standards and regulations.
- Record any modifications in accounting policies or practices.
19. Future Planning:
- Identify opportunities for process enhancement.
- Strategize for the upcoming months and anticipate potential challenges.
20. Audit Preparation
