Four Steps to Ensure Accurate Year-End Reports

keys accurate year end reports

Financial reports are essential for understanding your business’ financial health. However, verifying their accuracy is critical to make informed decisions. Accurate reports at year end are incredibly useful to your tax accountant as well. Your financials can help them build a basis for an effective tax strategy throughout the year. In this article, we will share four steps to determine if your year-end financial reports are accurate.

Match Bank Statements

Start by comparing your bank statements with the financial data in your reports. Check if the balances match. Any differences should be investigated further. 

What kinds of differences should you look for? We have a separate blog article discussing what to look for, but for sake of simplicity, here are a few red flags:

  • Outstanding deposits and payments
  • Duplicate transactions
  • Transactions from the bank statement that are not in your books

Check for Consistency

Review the balance sheet and income statement. Look for any out of the ordinary amounts. Compare the reports to the prior year and look for unusual changes. Make sure that there is consistency with how similar transactions have been recorded. 

Need a list of specific items to look for? Check out our articles on reviewing both the Balance Sheet and Income Statement.

Verify with Supporting Documents

Cross-check your reports with invoices, receipts, and other supporting documents. This helps confirm that the recorded transactions are accurate. Consider attaching documentation to significant transactions, such as fixed asset purchases, adjusting entries, or large deposits. 

Seek Expert Advice

Consider consulting with an experienced bookkeeper or accountant. Their expertise can provide valuable insights and help identify any errors or areas needing improvement in your financial reports.

By following these steps, you can better ensure that your year-end financial reports are accurate for tax purposes. 

Not sure of which additional reports to look at? Check out our blog on Which Reports Should I Look at? Regular review and seeking professional help when needed will help you to maintain reliable financial records.