How Bookkeepers and Clients Can Reduce Accounting Costs Before Sending Year-End Financials
As an accounting firm, we often see bookkeepers and business owners paying more than necessary for year-end financial statement preparation. The good news? A little preparation before sending your records to your accountant can lead to significant cost savings. Here’s a checklist to ensure your books are in great shape before the year-end review.
1. Reconcile Bank and Credit Card Accounts
Before sending your records to your accountant, make sure all bank and credit card accounts are fully reconciled. Any unreconciled transactions should be investigated and corrected. This ensures accuracy and reduces the time spent by your accountant correcting discrepancies.
How to Do It:
✅ Compare your bank statements to your accounting records.
✅ Investigate and resolve any missing or duplicate transactions.
✅ Ensure the ending balances in your software match the bank statement balances.
2. Review Accounts Payable and Receivable
Unpaid invoices and outstanding bills should be reviewed for accuracy. Are there any old, uncollectible amounts that need to be written off? Are there duplicate or missing entries? Cleaning up accounts payable and receivable before sending your records will streamline the process.
How to Do It:
✅ Verify outstanding customer invoices and follow up on payments.
✅ Identify any old invoices that should be written off as bad debts.
✅ Ensure supplier bills match actual payments made.
3. Ensure Payables and Receivables Listings Match the General Ledger
A common issue at year-end is discrepancies between the detailed payables and receivables subledgers and the general ledger control accounts. Ensuring these match before sending your records will reduce time-consuming adjustments.
How to Do It:
✅ Run the accounts receivable and accounts payable aging reports.
✅ Compare the total amounts to the general ledger control accounts.
✅ Investigate and resolve any discrepancies.
✅ Select the 10 largest accounts payable balances and compare them to supplier statements to ensure completeness and accuracy.
4. Categorize Expenses Correctly
One of the biggest time drains for accountants is reclassifying expenses. If your expenses are categorized properly in the bookkeeping system, your accountant won’t have to spend time reallocating them.
How to Do It:
✅ Assign expenses to the correct categories (e.g., office supplies, rent, utilities).
✅ Review transactions coded as “miscellaneous” or “uncategorized” and assign proper accounts.
✅ Ensure all personal expenses are clearly marked and separated from business expenses.
5. Verify Payroll Entries
If your business has employees, payroll should be reviewed for accuracy before submitting year-end records. Payroll errors can cause significant discrepancies in financial statements.
How to Do It:
✅ Confirm that all payroll expenses (wages, benefits, CPP, EI, and taxes) are recorded.
✅ Ensure payroll liabilities match government remittances.
✅ Check that all bonuses and adjustments are properly recorded.
6. Review Loan and Credit Card Balances
If your business has loans or credit cards, the balances in your books should match the lender’s statements. Unrecorded loan interest or missing transactions can create discrepancies that require adjustments by your accountant.
How to Do It:
✅ Compare your loan statements to the balances in your bookkeeping software.
✅ Ensure all interest and principal payments are properly recorded.
✅ Confirm that credit card balances match the statement totals.
7. Provide Supporting Documentation
Missing or incomplete documentation can slow down the accounting process. Ensure all necessary documents are available and well-organized before handing over your records.
What to Provide:
📌 Bank and credit card statements for the year
📌 Loan statements showing year-end balances
📌 Payroll records and government remittance summaries
📌 Copies of major asset purchases or loan agreements
📌 Supporting invoices for unusual or large expenses
The Bottom Line: Save Time, Save Money
By following this checklist, you can significantly reduce your accountant’s time cleaning up your books—ultimately reducing your accounting fees. A well-prepared set of records allows your accountant to focus on tax strategies, financial insights, and helping you grow your business rather than fixing bookkeeping errors.
If you need assistance with bookkeeping best practices, reach out to us. We’re happy to help you streamline your processes and keep your accounting costs down!
