YOU MISSED WHAT?! THE MOST OVERLOOKED ACCOUNTING TASKS - PART II
In the last article, we reviewed some of the overlooked accounting tasks. These included: matching the books to the prior year tax return, payroll reconciliations, properly categorizing assets, and accruing depreciation/amortization. Please refer back to that article if you need assistance with those items.
Here’s a few more tasks to stay on top of:
1099 VENDOR TRACKING AND MAPPING
You MUST issue any vendor or contractor you pay over $600 a 1099 by January 31st of each year (for the prior year). The IRS gives an exception to vendors who are incorporated (S or C Corp, NOT LLCs), and some vendors you must issue a 1099 regardless, such as attorneys. A good rule of thumb is to make every Vendor you pay, regardless of the amount at the time, fill out a W9 form prior to payment. If they want to get paid, they need to fill out the form. This will save you a ton of effort in trying to track down vendors after the fact. Make sure that whoever is doing your accounting has mapped your accounting system properly to track these vendors, and actually files any 1099s needed by the deadline.
RUNNING COMPARATIVE REPORTS MONTHLY TO FIND INCONSISTENCIES
This is a task that often goes overlooked by bookkeepers more often than accountants. After reconciling the bank accounts for the period and posting all applicable entries, it is important to run comparative reports. You can run a Comparative Balance Sheet showing the current year-to-date (YTD), as well as the prior YTD numbers. This will help you see any major changes from the prior year. Notice a $50,000 increase in assets, but don’t remember the client purchasing a new equipment?… Time to investigate further! You can also run a P&L by month or quarter to see any major changes in expenses. This will help you catch any entry errors, as well as make you feel prepared to explain any inconsistencies to the client.
HAVING A CHECKLIST!
This is one step that most accountants skip, especially if they have been working with the same clients for a long time. Having a checklist will help you catch tasks that are only done quarterly or annually, such as sales tax filing, quarterly tax payments, and 1099 filing. While it may seem like a waste of time if you’ve gotten into a routine with your clients, it can be essential during tax time or busier seasons to make sure things do not fall between the cracks.
While there is no way to fully error-proof your or your clients’ books, these tips will help decrease the likelihood of mistakes. If you need assistance with your bookkeeping, accounting, or operational accounting workflow, contact us today!
Writer: Heather D. Richard