The year goes by so fast and we are already in June. It is time to start thinking about your year-end processes. Maybe this is your first year closing the books or maybe you have done it for the past 30 years; there are always so many things to remember especially when you do them only once a year. What entries need to be made? What reconciliations should be completed? What reports need to be filed and when?
The following is a list of items that would be helpful to include in your year-end checklist.
Start with the Basics
- Do all your funds balance? Debits = Credits?
- Surprisingly we are given trial balances that are out of balance, so this is always a good place to start.
- Have all transfers been made? If there was an STM meeting in May, are all transfers included? (MA)
- Have all budget adjustments been made?
- If you have due to and due from accounts, do they balance? If permanent transfers need to be made between accounts to close them, have they been done?
- Do all accounts look appropriate? Are there any credit balance asset accounts? On the reverse side, are there any debit balance liability accounts?
- Do your trends for revenues and expenses from the prior year seem appropriate or has there been a huge swing in a specific account?
- This could be an indication that something was misposted.
- It also could be an indication that you need to look more closely at a particular department.
- Have all departments received and approved their budget vs actual for revenues and expenses?
- The department heads should know from their reports where items should have been posted. They may also be able to help identify a posting error.
- Have all year-end reserves been recorded?
- Reserve for encumbrances
- Reserve for expenditures
- Any deficit balances that need to be reserved
- Treasurer cash reconciliation to the general ledger.
- Receivable reconciliation between the Collector balance and the general ledger.
- Grant fund balance reconciliation between the general ledger and the grant administrators.
- OPEB trust fund reconciliation to the investment bank account. (MA)
- If you have an OPEB trust fund, this is an important reconciliation. It makes it so much easier for your actuary and auditors to complete your applicable reports. (MA)
- Ensure fixed asset additions and disposals request is sent out to department heads.
- This will make it easier for you to prepare your fixed assets or have them available for whoever does.
- Update all activity schedules to help prepare the Schedule A. (MA)
- Make sure to understand any new updates that have taken place since the last time that you prepared your DOR/DRA (MA & NH) reports, such as new cannabis line items or new formats. (MA)
- Consider year-end payroll needs. Make sure everyone is aware of their time-sheet completion dates. Do you split year-end payroll or do you accrue it?
Dates to Remember
- Warrants/Accounts payable (MA & NH) – Make everyone aware of when the last warrant of the year will be run, so department heads can prepare. Make sure they get their information to you on time.
- Payroll – Make everyone aware of the date of the last payroll of the year and what date it will go through.
- Free cash deadline – September 15 (MA)
- EOYR deadline – September 30 (MA)
- Schedule A deadline – November 30 (MA)
Closing the year is never an easy process and there is always something that comes up. These lists address the key areas that will help ensure the process goes a little smoother. If you prepare on the front-end, then hopefully you will have fewer problems when you are preparing your year-end reports.