Bookkeeping Checklist To Kick Off 2022

The Bookkeeping checklist to help you kick off 2022! The new year can be a little hectic for bookkeepers and business owners alike. It’s also prime time to complete tasks that will elevate your reputation and grow your business.

In addition to the normal workload, there are payroll deadlines, 1099’s and planning for the new year. We can easily get caught up in the craziness of the month and starting the next month, we feel like we can barely hold on. Here is a checklist to help you stay on task.


1 Unreconciled Transactions

Check all bank and credit card transactions for unreconciled transactions. As many businesses are opting for electronic payments, unreconciled expenses are becoming less common. Unless you write a large number of checks, unreconciled expenses should send up a red flag in your end-of-year process, as they can indicate duplicates and therefore overstated expenses.

2 Personal Expenses on the Books

Whether you grabbed the wrong credit card or intentionally ran personal expenses through your business for the tax deduction, catching any personal expenses on the books prior to sending them to your accountant is crucial. You will often find these expenses buried in the meals, entertainment, and office expense categories.

Whenever you come across an expense that might not be tax-deductible, consider moving it to an expense account called “Accountant Review”. You can set up sub-accounts under the parent account to separate things out for your accountant.

3 Look Expenses That Should Be On the Books, But Aren’t

There are a number of reasons why an expense should be on the books that isn’t. One of the most common reasons is that the business was low on cash and so the owner (you) used personal expenses, personal credit card to make the payment, then forgot to record that into your books.

To find those expenses, run a P&L (Profit and Loss) comparing the year completed to the prior year. Make sure the totals in each category make sense and nothing stands out.


4 Reconcile These Balance Sheet Accounts

Reconcile all the accounts on the balance sheet, paying attention to the undeposited funds account, loan accounts, payroll liabilities and accounts payable and accounts receivable. If you are using Quickbooks, you can reconcile every account on the balance sheet just as you would a checking or credit card account.

5 Check Your Retained Earnings

In order to ensure there were no transactions posted to a prior year, make sure retained earnings on your balance sheet match the prior years retained earnings. You should be close year after year in your earnings.

Here’s an example. Let’s say your balance sheet dated 12/31/2021 shows retained earnings of $59,790. Compare that amount to the Schedule L for your 2020 tax return. If Schedule L shows a retained earnings amount of $59,790 as well, then you are good to go. If it shows any other amount, you will need to do some research to find the cause of the change. Depending on the size and nature of the change, most tax accountants will just have you change the date of the transaction so it appears in the year just completed (in this case, 2021). Occasionally, though, the accountant will decide to amend the tax return for the year prior (2020).