Here it comes … the End of the Year!! If your year-end coincides with the end of the calendar year, it is time to get ready. If your year-end is at another time of the year, hang onto this info! Here are a few best accounting practices for dealerships that will show you what needs to be done and how to better prepare for year-end.
Do as much reconciling in advance as possible. The following should be reconciled every month so that the end of the year is just another month:
- Bank accounts
- Credit card accounts
- Vendor statements
- AP subledger to GL
- AR subledger to GL
- Inventory subledgers to GL
- Payroll accounts
Review each account on your balance sheet to tie it to source documents. Clean up your AR and AP to offset debits/credits for individual customers/vendors. Many companies like to pay as many bills as possible before the end of the year – so review your open AP and pay what you can.
Plan/conduct a physical inventory. One of the best accounting practices for dealerships is to use cycle counts year-round so that you don’t have to shut down and count everything all at once.
The service department needs to close out all their monthly work orders on a timely basis. Review all previously saved invoices to determine whether you’ve invoiced everything that should be invoiced.
Your accounting software may require some preparations to begin a new year. For example, in order to finalize an invoice or make any accounting entries in the new year, Charter Software’s ASPEN system requires that the new year be defined in the System Settings function.
Be sure to contact your outside accountant to see if there’s anything specific they will want to see so that you have time to gather the information they want.