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Year-end guide and checklist - Business Owners

As the end of the year approaches, you will need to complete certain tasks in QuickBooks Online to close out the old year and prepare for the new one.

The following sections can help guide you through these year-end tasks to make the ending of one year and the beginning of another easier.

Tip: Looking for a walk-through guide of these steps? Our QuickBooks Online Digital Assistant can help. Get started now.

It's important to ensure that the correct month is selected for the start of your financial year to allow QuickBooks Online to clear accounting ledgers behind the scenes while you work on other year-end activities.

To confirm or change the first month of your financial year:

  1. Go to Settings ⚙.
  2. Select Account and Settings.
  3. Select Advanced.
  4. In the Accounting section, verify that the setting in the first month of the financial year field is correct, or select Edit ✎ to change the setting.
  5. Select Save.
  6. Select Done.

Your financial year is confirmed.

Once you have added the receipts and bills in QuickBooks, they’ll show up in the For Review tab where you can review, edit, and match the transactions.

For further information on adding your receipts and bills please select the link.  This also includes Receipt Capture which extracts the data for you.  Capture and Catergorise Expenses and Bills

At the end of the year, it's a good idea to ensure your client base has up to date account balances and that billing and payments are also up to date.

To check customer account balances:

  1. Select Reports.
  2. In the search bar, enter Accounts Receivable Ageing Summary or Accounts Receivable Ageing Detail (QuickBooks Online Essentials and Plus only) and select the report you want to review.
  3. Review the report to identify customers with outstanding balances.

Here is some more information on how to Run Reports. 

Once you identify any outstanding balances, you can send statements to the customers.

To send a statement:

  1. Select Sales, then select Customers.
  2. Locate the customer you want to send a statement to.
  3. From the Action column drop-down menu, select Create statement.
  4. In the Create Statements window, select Print and Preview to print the statement, or select Save and send to create and preview an email to send with the statement to the customer.

Here's some more information regarding Creating Statements.

You will also want to confirm that all deposits are cleared from the deposit queue. Any funds sitting in this queue will not be included in your current year's income.

Here's how you Create a Bank Deposit.

The end of the year is a good time to take care of any outstanding bills you owe for the year, and address any outstanding credits, discounts, or products you're owed from your suppliers.

To review outstanding bills:

  1. Select Reports.
  2. On the search bar, enter Accounts Payable Ageing Summary or Accounts Payable Ageing Detail and select the report you want to review. These reports are available in QuickBooks Online Essentials and Plus only.
  3. Review the report to identify any outstanding bills to pay before the end of the year.

Once you identify any outstanding bills, you can clear them before the end of the year.

Here is some additional information on how to Review Bills

It is good practice to match your QuickBooks Online data to your bank and credit card accounts to ensure that all transactions have been recorded correctly, and that your year-end reports display accurate financial data.

To reconcile your accounts:

  1. Select Settings ⚙️.
  2. Within the tools column Select Reconcile.
  3. Follow the prompts to match the transactions on your bank or credit card statement with the transactions on the Reconcile page.

For more detailed information about reconciling, see How to reconcile accounts or Year-end: Reconcile accounts for the entire year

If your company is required by the ATO to report payments to contractors or subcontractors, you will need to prepare a TPAR and lodge it with the ATO. 

What is TPAR?

If TPAR is not enabled for your file, learn how to enable TPAR in QuickBooks Online.

Enable TPAR for the supplier

First, you’ll need to make sure that relevant suppliers are flagged to be included in the TPAR. To add a supplier to the TPAR:

  1. From the left-hand navigation bar, select Expenses.
  2. Choose Suppliers.
  3. Click on the name of the Supplier, then Edit.
  4. Check the box Include this supplier in my annual TPAR.
  5. Select Save.

Run the TPAR report

  1. Select Reports in the left-hand navigation bar
  2. Under Manage Taxes, select Taxable Payments Annual Report
  3. Ensure the Transaction Date/Report Period is correct and then click Run Report

Download the TPAR report

Once the report is finalised, download the TPAR file to be lodged to the ATO. 

  1. Navigate to the top of the TPAR report
  2. Select Download TPAR button
  3. Once the TPAR is ready to download, select Download

If there are missing transactions in the TPAR, ensure that you have enabled the transaction to be added to the TPAR. To check this:

  1. Find and select the relevant transaction
  2. Under the Payee drop-down menu, ensure that Include the transaction in my annual TPAR is ticked
  3. Select Save

If you've been using QuickBooks Payroll to lodge pay events to the ATO under Single Touch Payroll (STP), you will have to lodge a Finalisation Event to send the final year-to-date figures to the ATO. 

To start this process:

  1. Select Employees from the menu.
  2. Select the Reports tab, then select Single Touch Payroll.
  3. Select Start Finalisation Process and follow the steps in the wizard to confirm YTD payroll data, RFBA amounts and request client authority.

Note: If employees have been paid on multiple pay schedules throughout the financial year, you DO NOT have to complete a finalisation event for each pay schedule of that employee. Only complete the finalisation event for the pay schedule the employee has mainly been using throughout the year.

Note: If you need to make amendments to the payroll figures after lodging a Finalisation Event, you MUST create an amended Finalisation Event to update the ATO.

More information about creating and lodging a Finalisation Event and amended Finalisation Event can be found here: How to create and lodge a Finalisation Event

Your accountant has the expertise necessary to give you suggestions on data input, help with your year-end process, and forecast your company’s financial future.

If you haven't already done so, QuickBooks Online makes it easy to invite your accountant to collaborate with you, and to give them access to your QuickBooks Online account.

Once your accountant accepts the invitation, they have access to your accounts.

It's important to run year-end reports to review the information and identify any issues or discrepancies.

To run year-end reports:

  1. Go to Reports.
  2. Locate and review the Profit and Loss report and the Balance Sheet, as well as any customised reports you or your accountant require.
  3. Make sure that the Profit for the Year figure matches the balance on the Profit and Loss report.

You and your accountant can review the information in these reports to identify any potential issues to resolve.

Your accountant can review a detailed view of how transactions or journals will affect the Profit and Loss or Balance Sheet depending on the account types, and can make changes to any item for appropriate display on reports.

To review detailed information:

  1. Ask your accountant to sign in to their account.
  2. Under Accountant Tools (the envelope icon), select Reclassify Transactions.

Your accountant can Reclassify or move transactions multiple transactions at once 

If your Retained Earnings need to be divided among owners or partners, your accountant can assist you.

It's good practice to have previously set up an Owner's Equity and Draws ledger for any payments or withdrawals from the company during the year by the key people who founded the company.

To create journal entries:

  1. Select + New.
  2. Select Journal Entry.

For detailed information about journal entries, see How to create a journal entry

If you have been recording your Mileage in QuickBooks Online then you can generate a Mileage report to review the mileage deductions

Learn more about mileage and how to extract the mileage data from the company.

If you’re a sole trader or an individual in a partnership, keep these guidelines in mind:

  • You can claim deductions for the business kilometres you've travelled on up to 3 vehicles, including motorbikes.
  • Your deductions stop once you reach 5,000 km per vehicle. You can continue tracking your kilometres reaching the limit, but it won't give you any additional deductions.

For more information, visit the ATO’s website.

Taxes are typically prepared by a company's accountant.

When you send your accountant an invitation to your QuickBooks Online account, you give the accountant access to all the financial information they need to prepare and file taxes on your company's behalf, and to make any necessary changes.

Your accountant can use this information to prepare, or help you to prepare, any required year-end tax return.

Closing the books lets you control changes to transactions dated before the end of the financial year.

  1. Select Settings ⚙️.
  2. Select Account and Settings.
  3. Select Advanced.
  4. In the Accounting section, select the pencil (edit) icon to open the fields for editing.
  5. Select the Close the books checkbox.
  6. Enter a Closing Date and select a warning preference. You can also optionally enter and confirm a password that anyone who tries to make changes must enter.
  7. Select Save.
  8. Select Done.

For detailed steps to guide you through closing your books, see How to close the books

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