"When you're cleaning up your accounts, here are some things to watch for:

• Expenses posted to the wrong account. I like to setup a "suspense" account so that my clients can have someplace to put items they don't know where to post.
• Mysterious new expense accounts that are duplicated somewhere else: Get rid of these.
• Transactions posted to the parent account, instead of one of the sub-accounts: When you run your Profit & Loss or Balance Sheet, and you see an account that says 'ACCOUNT NAME — Other' then you'll know that you have a transaction that's not classified to the correct sub account."

— Chuck Vigeant

"Don't post the interest on your loan as part of the total payment made against the loan. An amortized loan schedule, or using the Loan Manager tool within QuickBooks, can help you with this. If you do post the interest to your loan balance, your end-of-year loan statements won't match the loan balances presented on the QuickBooks balance sheet, and you won't get the proper expense deduction on your taxes."

— Chuck Vigeant

"Separate tax forms are required for expenses and income related to rental properties. Tracking this information properly is a benefit to the taxpayer."

— Chuck Vigeant

"ProAdvisors can help you with more than accounting and taxes. We're QuickBooks experts, so we can help you use the software in the best way for your business. Make a list of all the things that you've struggled with and any questions you have. Then call a ProAdvisor to help you find the answers you need so you can record everything correctly in QuickBooks. You'll find that the time spent now making sure that all is in order will pay dividends after year-end in a smoother, easier and quicker filing season."

— Suzi Graden

"Everybody knows what I'm talking about here. Inventory and Assets are the two most troublesome areas for some of my larger clients. I eyeball the COGS percentages for "reasonableness," and then check the posting accounts for each item. And I also check transaction postings and manual receiving records if there are great discrepancies between the theoretical count in QuickBooks and the actual count at the end of the year."

— Chuck Vigeant

"Year-end for my clients always includes the following items as well:

• Bank reconciliations/examination: This is the number one priority.
• Examine Accounts Receivable and Accounts Payable: Are there unapplied transactions? Are there outstanding items that cannot be collected?
• Compare of Profit & Loss and Balance Sheet to previous years: Anything out of place?
• Eyeball the general ledger detail for "suspicious" entries, or incorrect posted entries.
• Examine missing check numbers.
• Examine missing invoice numbers.
• Close out estimates that should be inactive.
• Close Purchase Orders that should be inactive."

— Chuck Vigeant

"Now is a great time to review your year-to-date information in QuickBooks. Review various reports to make sure they are reasonable, including sales, inventory, receivables and payables. Make sure your bank accounts are reconciled. Also, look at a balance sheet and profit and loss statement to see if they look reasonable. Drill down into anything that doesn't look right. Note any questions you come across that you need to discuss with your accountant or tax preparer."

— Inga Arendt

"Asset documentation is critical to ensure the accuracy of current and accumulated depreciation on my clients' tax returns.

"I ask my clients to create folders for all their assets-whether depreciated or capitalized. For new items, I want information about the purchase price, trade-ins, associated loan if applicable, date in service, serial number or VIN, and a picture of the asset. For disposed items, I want the date disposed, the serial number, and where it was traded in, if applicable.

"Most businesses take a year end inventory count. Why not also do a year-end count of your assets, machinery, etc.? I've had clients who've reported an asset (with a particular serial number) sold one year, and then it mysteriously re-appeared a year later!"

— Chuck Vigeant

"Giving my clients an end-of-year checklist is helpful, but I always make sure to follow up with them, and do a review of my own. For larger clients, I prefer to visit with them quarterly, to fix things as they go along; but again, a total year-end review is usually necessary if the previous periods aren't locked."

— Chuck Vigeant

"Year-end planning is so important. After the year has expired, my job as an accountant is nothing more than a mortician — preparing the return for burial at the IRS service center. Before year-end we have all the opportunities in the world.

"With c corporations, year-end planning is a must. Ending the year with a net income can result in double tax to the small business owner."

— Suzi Graden

"Year-end accounting adjustments can cause a large swing in what was initially a net income or loss. Also, a loss on the financial statements may result in taxable income or vice versa, income on the financial statements may result in a taxable loss. The best way to take advantage of the numerous tax deductions available is to actively communicate with your accountant or tax preparer before the end of the year. Ask him or her to review your records and prepare a tax projection so everyone can be aware of any adjustments and plan accordingly. This way, you'll avoid the classic horror story of finding out too late that you owe a large balance to the government — and to your accountant for cleaning up your financial records.

"The time you'll spend reviewing your financial and payroll records, as well as the cost of paying for a professional review and tax projection, usually pays for itself in tax savings and peace of mind. Why make the end of the year more stressful than it needs to be if careful planning can avoid it?"

— Inga Arendt

"Tax planning time is the best time of year to develop strategies for increasing profits. During the heat of tax season, when so much focus is on getting the information to do the return, there's less time and energy to really evaluate the business finances and build strategies.

"I met with a client recently who came in to discuss a big business decision. We've invited this client to participate in year-end planning for the past several years, but they've always declined. As we discussed the big decision, many other issues came up, and we were able to help them through making several changes in their business that have increased profits, helped them contribute more to retirement accounts, and made the business a better place to work day-to-day.

"It's sad to think that we could have worked together to make the same changes three years ago, and the client could have been receiving the benefits all this time."

— Suzi Graden

"If you wait until after December 31 to set up a retirement account, you have two basic options: IRAs or SEPs. An IRA is very limited in the amount of money you can contribute, while a SEP is very costly in terms of contributions for your employees.

"If you start planning before year end, however, a SIMPLE, a profit sharing plan or safe harbor 401k profit sharing, or defined benefit plan may be a much more effective vehicle for investing pre-tax funds. The deadline for these accounts can be much earlier, in October, November, and December. When you file your return, you make a commitment to contribute to the plan, and then must make the contributions to the plan before the extended due date of your tax return (either September 15 or October 15).

"Uncle Sam is committed to helping you save for retirement through a reduction in taxes. So, take advantage!"

— Suzi Graden

"October through December is the ideal time to prepare for the January payroll and 1099 reporting requirements.

• Make sure you have the correct names, social security numbers, and addresses for all of the employees paid during the year.
• Review the year-to-date payroll information for each employee for reasonableness (the Payroll Summary report is great for this).
• Spot-check some of the calculations to make sure that all additions and deductions are being handled properly for tax purposes.
• Review the 1099 set-up in Preferences as well as the 1099 summary or detail report.
• Collect addresses and federal identification numbers for any vendors that you know will need a 1099."

— Inga Arendt