In some accounting programs, year-end accounting procedures are complicated and time-consuming. Flare has simplified the year-end process by eliminating the need to close the current fiscal year and carrying forward balances into the following fiscal year.
The following year-end checklist will demonstrate how easy the year-end process is in Flare.
Year End Checklist
- Reconcile bank and book accounts
In Flare, “bank” accounts are balances of your real-world bank accounts and other financial accounts. “Book” accounts are the balances of bank and other financial accounts you’ve created in Flare. Use Flare’s bank reconciliation to ensure that bank accounts agree with book accounts.
- Create invoices you haven’t yet created
Create any invoices that you haven’t yet created for the current fiscal year.
- Record bills
Record bills that you haven’t yet recorded for the current fiscal year.
- Record bill payments
Record bill payments that you haven’t yet recorded for the current fiscal year.
- Create year-end adjustment entries
If applicable, make adjustment entries for depreciation, amortization and prepaid expenses. We highly recommend inviting your accountant to use Flare so they can make year-end adjustments for you.
- Run a trial balance
Run a trial balance on the final day of the fiscal year. In Flare, click “Reports” in the main menu and click the “Transaction Summary (trial balance”) tile (Figure 1 below).Figure 1: Transaction Summary report tile.
On the Transaction Summary report page, make sure you select the “Current Year” from the date presets dropdown menu (Figure 2 below) and then click “Run Report”.
Figure 2 – Transaction Summary report after selecting “Current Year” and running the report.
- Invite your accountant to use Flare
After you’ve completed the steps above, you can invite your accountant to use Flare. Your accountant can make any year-end adjustments, rectify discrepancies and run reports. Learn how to invite your accountant to use Flare.
- Run reports
If you are providing reports to your account, you may be want run the following and export them as PDF, CSV for Excel which you can then download and email your accountant.Profit and Loss (Income Statement)The Profit and Loss statement (income statement) is a calculation of Net Income which shows income from all sources, cost of goods sold and expenses by category.To run the Profit and Loss report, click “Reports” in Flare’s main menu then click the Profit & Loss tile (Figure 3 below). Make sure you select “Current Year” in the date-range preset (Figure 4 below).Figure 3: Profit & Loss tile in Flare’s reports.
Figure 4: Profit and Loss report for current fiscal year.
Sales Tax Report
The sales tax report will show what taxes you’ve charged, tax credits (if applicable) and the net due to tax authorities.To run a Sales Tax summary report, click “Reports” in Flare’s main menu then click the Sales Tax tile (Figure 5 below). Select the “Current Year” date preset and run the report (Figure 6 below). The tax summary report calculates the net due for each type of tax you charge.
Figure 5– Sales Tax tile in Flare’s reports.
Figure 6 – Sales Tax Report (summary) in Flare reports.
Detailed Sales Tax Reports
After running the summary, run detailed reports for each type of tax you charged. Click the tax row (Figure 6 above) and then run the report for the entire fiscal year by choosing “Current Year” from the Date preset dropdown menu (Figure 7 below).
Figure 7 – Sales Tax Details report.
Read more about Flare financial statements and reports.
Don’t Want to DIY? Don’t Worry. Be Happy!
The great thing about Flare, is that if you’ve been using it to record invoices, bills, payments and bank transactions then most of the heavy-lifting has already been done in the background as you work. Because of this, you can invite your accountant or bookkeeper and leave the year-end procedures to them. See User Management in Flare’s help guide to see how easy it is to invite your accountant or bookkeeper.
The importance of being up to date
At year end, you’ll find out why it’s important to record all invoices, bills, payments and other transactions in a timely manner. Doing so will make life much easier come year end.
Sign Up for a Free Trial of Flare Cloud Accounting
Sign up for a free trial and see what Flare can do for your business. Whether you are a freelancer, solopreneur or small business owner, you’ll love Flare accounting. Flare makes accounting hassle-free. Flare’s financial dashboard is updated in real time, providing you with valuable financial performance metrics that allow you to see and correct issues before they become problems that eat up profit.