Advertiser Disclosure

💳 Save money on credit card processing with one our top 5 picks for 2021

The 2020 Year-End Accounting Checklist: How To Close The Books At The End Of The Year

Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. You've heard about closing the books, but how do you do it? Follow these simple year-end accounting steps
Chelsea Krause

Chelsea Krause

Content Strategist - Accounting & eCommerce
Chelsea Krause is a writer who has specialized in accounting for over three years and is a QuickBooks Certified User. She has a BA in English & Creative Writing from George Fox University and studied at the University of Oxford as well. She has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business.
Chelsea Krause

We've done in-depth testing of each and confidently recommend them.

We've done in-depth testing of each and confidently recommend them.

Leave a comment

12 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    L

    Thanks so much for the information.

      Marcy

      Hi Chelsea,
      Great article, thank you! I have a crazy question…I am working with a small business and the company is currently using Quickbooks Pro 2018 version. Their books have not been closed for over five years. They thought that closing was automatically done in Quickbooks.
      I see obsolete assets and liabilities on their balance sheet–what would you advise doing? Start a new Company file from scratch?

        Jessica Dinsmore

        Hi Marcy,

        Great question! You do not need to start a new company file from scratch, you just need to clean up the current file. It would cause more issues if you were just to start a new file and lose the old historical data. If you do really want a new file, you should clean up the current one and then enter accurate beginning numbers into a new file.

        The first step would be to catch up on the bank reconciliations. Any obsolete liabilities can be corrected either with the use of a Journal Entry or Vendor Credit Memo to remove the liability in the most recent year (in which they have not yet filed taxes & is not closed). Any obsolete assets can also be removed with the proper Journal Entry, however, you need to be more careful with this one and may need to run the entry by their tax preparer first. There is typically depreciation associated with an asset that will need to be removed as well. Their tax preparer should be providing them with a list of assets each year (that matches the balance sheet) and should be asking if any of them are obsolete, sold, scrapped, etc. Best of luck!

          Theresa Turner

          It is a very Informative post.

            This comment refers to an earlier version of this post and may be outdated.

            Chelsea Krause

            I’m glad you found the information helpful, Theresa! Thanks for reading!

            -Chelsea Krause

              This comment refers to an earlier version of this post and may be outdated.

              Mickie

              Chelsea,
              I’m new to small business bookkeeping. The business has been dormant for the first few months of the year and not sure how to start fresh books for 2019. Using QB2018. Do you have a guide for starting a new year?

              Thanks in advance
              Mickie

                This comment refers to an earlier version of this post and may be outdated.

                Chelsea Krause

                Hi Mickie,

                Thanks for reaching out! This post, while a bit dated, offers helpful insight on how to prepare your books for a new year. If you’re wanting to know how to start fresh in QuickBooks, this article can help.

                Best wishes,

                – Chelsea Krause

                  This comment refers to an earlier version of this post and may be outdated.

                  Caren

                  Great information. I have a question.

                  After going through year end for corporate taxes, I found a few invoices were unpaid. We email, mail and fax invoices to clients. This client said they never received and closed their books. So I would assume they billed their client and failed to pay us…and are using the excuse of that they closed their book as reason to not pay. A repeat customer, not one that we’ve had issues with. A customer we give special pricing to, great lead times. So what do we do? It’s less than $500 but I expect payment for service. Am I wrong to ask for for what’s owed?

                    This comment refers to an earlier version of this post and may be outdated.

                    Chelsea Krause

                    Hi Caren,

                    I’m sorry you’re having to deal with this. I’ve found a few articles that offer helpful advice on how to take action against non-paying customers: Ghosted: What To Do When A Client Doesn’t Pay Up and What To Do When A Client Doesn’t Pay. If these steps don’t work and your client absolutely refuses to pay, you can write off the invoiced amount as “bad debt” for a tax deduction. Here’s how the process works.

                    I’d also recommend consulting your accountant to see if they have any additional advice for how to deal with this situation. I hope this helps and that everything works out well.

                    Best wishes,

                    -Chelsea Krause

                      This comment refers to an earlier version of this post and may be outdated.

                      Tina Gunderson

                      My question is are you able to input information that happened after January 1, 2018 but was for the year 2017 in accounting software? Example, $3,000 worth of expenses that were not transferred to the proper accounts until January, can I transfer them in my software as 12/31/2017 so my accounts zero out?

                        This comment refers to an earlier version of this post and may be outdated.

                        Chelsea Krause

                        Hi Tina,

                        Could you tell me more of the specifics of the transaction you are trying to enter? Also, which accounting software are you using?

                        -Chelsea Krause

                          This comment refers to an earlier version of this post and may be outdated.

                          Joel

                          Thank you, Chelsea for great article! So true.
                          I run a small retail business. We usually don`t have much time to keep and enter receipts and last year we found that we even lost many. Not taking into account those mail receipts that you get when you or your employees shop online for the small staff.
                          We have tried many of the expense management software lately but were surprised about the level of detail and all those features that seem to be created exactly for small business needs. So if anyone would be interested, just try Veryfi app. Good thing is that my accountant has constant access to this app, and see all the company`s financial info in real-time and can advise right away. Helps a lot with taxes.

                            This comment refers to an earlier version of this post and may be outdated.

                          Leave a Reply

                          Your email address will not be published. Required fields are marked *

                          Your Review

                          Comment moderation is enabled. Your comment may take some time to appear.
                          Please read the "User Review and Comment Policy" before posting.

                          Share

                          Get Started With Featured Pick! 🏆

                          is our current featured vendor in this category.




                          Get Started

                          Learn more today with no commitment.

                          Featured Offer: We Recommend QuickBooks 🎉

                          Take it for a spin with a free trial.

                          Try QuickBooks Today

                          We Recommend Fattmerchant 🏆

                          Fattmerchant is one of our top picks for Credit Card Processing!

                           

                           

                          We love Fattmerchant as a credit card processor for its predictable pricing, excellent service, and integrated billing features. Get started today and get your first month for $5 with an exclusive Merchant Maverick promo.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Divvy Card 🏆

                          Divvy Card is one of our top picks for Corporate Charge Cards!

                           

                           

                          Divvy offers a free corporate card for virtually any business. Start earning rewards with your corporate spending today.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Fattmerchant 🏆

                          Fattmerchant is one of our top picks for Credit Card Processing!

                           

                           

                          We love Fattmerchant as a credit card processor for its predictable pricing, excellent service, and integrated billing features. Get started today and get your first month for $5 with an exclusive Merchant Maverick promo.

                          Get Started

                          Get started with no commitment today.

                          We Recommend PaymentCloud 🏆

                          PaymentCloud is one of our top picks for credit card processing!

                           

                           

                          We love PaymentCloud's predictable pricing and excellent service.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Donorbox 🏆

                          Donorbox is one of our top picks for Donation Systems!

                           

                           

                          Donorbox is a versatile, feature-rich, and easy-to-use donation management system that can help you attract more recurring donors. Get started today for free.

                          Get Started

                          Get started with no commitment today.

                          We Recommend BigCommerce 🏆

                          BigCommerce is one of our top picks for eCommerce Platforms!

                           

                           

                          Bigcommerce offers exceptional tools for all eCommerce businesses from startups looking to build a site to enterprise-level systems. Now get a 15-day free trial + one month free when you upgrade!

                          Get Started

                          Get started with no commitment today.

                          We Recommend PaymentCloud 🏆

                          PaymentCloud is one of our top picks for credit card processing!

                           

                           

                          We love PaymentCloud's predictable pricing and excellent service.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Helcim 🏆

                          Helcim is one of our top picks for payment processing!

                           

                           

                          Helcim has exceptional service and an advanced platform that we highly recommend for businesses in Canada and the US. Get three months free when you sign up with Helcim through our links!

                          Get Started

                          Get started with no commitment today.

                          We Recommend PaymentCloud 🏆

                          PaymentCloud is one of our top picks for credit card processing!

                           

                           

                          We love PaymentCloud's predictable pricing and excellent service.

                          Get Started

                          Get started with no commitment today.

                          We Recommend OnDeck 🏆

                          OnDeck is one of our top picks for Business Loans!

                           

                           

                          OnDeck is our featured vendor for business loans and lines of credit. If you have at least one year in business, a personal credit score of 600 or higher, and $100K in annual revenue, OnDeck is ready to help your business get funded.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Lendio 🏆

                          Lendio is one of our top picks for PPP/Business Financing!

                           

                           

                          Lendio is a free-to-use marketplace that allows you to compare lenders side-by-side. Easily find PPP/SBA loans alongside other financing options.

                          Get Started

                          Get started with no commitment today.

                          We Recommend PaymentCloud 🏆

                          PaymentCloud is one of our top picks for credit card processing!

                           

                           

                          We love PaymentCloud's predictable pricing and excellent service.

                          Get Started

                          Get started with no commitment today.

                          We Recommend ADP Payroll 🏆

                          ADP Payroll is one of our top picks for Payroll Software!

                           

                           

                          Our reviewers like ADP Payroll for its advanced employee management, strong payroll features, and great customer support.👍

                          For a limited time, get three months free when you sign up via our links!

                          Get Started

                          Get started with no commitment today.

                          We Recommend Revel POS 🏆

                          Revel POS is one of our top picks for Point of Sale!

                           

                           

                          We love Revel POS for its advanced features and exceptional versatiliy in both the retail and restaurant industries. Get a demo today to find out everything Revel has to offer!

                          Get Started

                          Get started with no commitment today.

                          We Recommend TouchBistro 🏆

                          TouchBistro is one of our top picks for Restaurant POS!

                           

                           

                          Our reviewers praised TouchBistro for a well-designed UI, easy to use format, competitive monthly cost, and numerous integrations. Sign up today to see it in action.

                          Get Started

                          Get started with no commitment today.

                          PPP & EIDL Are Not Your Only Options

                          The SBA has expanded their loan portfolio and we have the list that no one else is talking about (yet) — Sign up for our newsletter to get your free copy!

                          • This field is for validation purposes and should be left unchanged.

                          We Recommend Fundera 🏆

                          Fundera is one of our top picks for SBA loans!

                           

                           

                          Fundera is a free-to-use marketplace that allows you to compare lenders side-by-side. Easily find SBA 7(a)loans alongside other financing options.

                          Get Started

                          Get started with no commitment today.

                          We Recommend ShippingEasy 🏆

                          ShippingEasy is one of our top picks for shipping software!

                           

                           

                          ShippingEasy got a 5-star review from our team. Get a 30-day free trial to access discounted USPS and UPS shipping rates and print labels in no time. No credit card required.

                          Get Started

                          Get started with no commitment today.

                          We Recommend Square POS 🏆

                          Square POS is one of our top picks for Point of Sale!

                           

                           

                          Square is free to use and currently includes a free card reader at sign-up!

                          No credit card is required to create your account.

                          Get Started

                          Get started with no commitment today.


                           

                          Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

                          Sign up for the Maverick Newsletter

                          • Please select topics of interest

                          • We occasionally send out emails with special offers.