When entering a new calendar year, businesses face the critical task of closing their books for the previous year. For organizations using an Enterprise Resource Planning platform, or ERP, this is not only about finalizing financial records. It is also about ensuring data accuracy and setting the stage for the coming year. Luckily, ERPs like NetSuite help set you up for success. Here are 9 tips to help when closing the month of your accounting year.
Prepare for Closing Month of Accounting Year
First, ensure your fiscal year and periods are set up correctly. Confirm that everyone involved in the process has the appropriate permissions to execute their tasks.
Reconcile Accounts
Next, complete all bank account and credit card reconciliations.
Review and Clean Up Transactions
Before closing month of accounting year, check for unapproved or pending transactions and address those first. Also, apply any unapplied customer or vendor payments and credits. And resolve or close any unnecessary open work orders.
Close Accounting Periods Sequentially
Before closing month of accounting year, start with a soft close to prevent new entries, while still allowing adjustments.
Run Key Reports by Closing Month of Accounting Year
Verify that your accounts balance and align with expectations. Ensure revenues and expenses are categorized correctly. And don't forget to review AP and AR aging reports.
Perform Year-End Adjustments
Post necessary adjustments for accruals, depreciation, and tax provisions. And adjust deferred revenue and expenses.
Archive and Document
Ensure your data is securely back up and archived.
NetSuite automatically retains data, but exporting key reports is a good practice.
Roll Forward Balances
Use NetSuite’s Year-End Closing Checklist to confirm that Retained Earnings are updated and balances are rolled forward.
Communicate With Your Team
Share timelines, responsibilities, and updates with your team members to ensure everyone is aligned during the process.
Closing Your Books by Closing Month of Accounting Year
Successfully closing the books at year-end is a vital process that ensures your business’s financial health and compliance with accounting standards.
By leveraging the full capabilities of NetSuite, you can streamline the process, minimize errors, and gain deeper insights into your company’s financial performance.
While it may seems daunting, careful preparation, proper reconciliation, and the use of best practices will help set the foundation for a smooth transition into the new year.
If you have any questions, please don't hesitate to contact us! Our helpful team would be happy to assist you.
