Starting a New Period
After completing your period-end procedures and financial statements, it's time to prepare for the new accounting period. This ensures a clean start and continued accuracy.
Year-End Checklist
✅ Complete All Transactions
- Record all revenue and expenses
- Process all invoices and bills
- Complete payroll for the period
- Record any year-end bonuses
✅ Reconcile All Accounts
- Bank accounts
- Credit cards
- Accounts receivable
- Accounts payable
- Inventory
✅ Make Adjusting Entries
- Accruals
- Deferrals
- Depreciation
- Bad debt allowance
- Inventory adjustments
✅ Prepare Financial Statements
- Income Statement
- Balance Sheet
- Cash Flow Statement
- Supporting schedules
✅ Close Temporary Accounts
- Close revenue accounts
- Close expense accounts
- Close draws/dividends
- Transfer to retained earnings
✅ Prepare for Taxes
- Organize tax documents
- Prepare schedules
- Meet with accountant
- File returns on time
✅ Archive Records
- Save digital backups
- Store paper documents
- Update retention schedule
- Secure confidential information
New Period Setup
1. Verify Opening Balances
Ensure all permanent account balances carry forward correctly:
- Cash accounts
- Accounts receivable
- Inventory
- Fixed assets
- Liabilities
- Equity
2. Reset Temporary Accounts
All should have zero balances:
- Revenue accounts
- Expense accounts
- Draws/dividends
3. Update Systems
- New fiscal year in software
- Update date ranges on reports
- Create new backup schedule
- Review user permissions
4. Review and Adjust
Chart of Accounts:
- Add new accounts if needed
- Inactivate unused accounts
- Update account names/descriptions
Budgets:
- Prepare new year budget
- Set financial goals
- Establish spending limits
- Plan for major purchases
Procedures:
- Review what worked well
- Identify improvements needed
- Update processes
- Train staff on changes
5. Plan Ahead
Set Goals:
- Revenue targets
- Expense controls
- Cash flow objectives
- Profitability goals
Schedule:
- Monthly close dates
- Quarterly reviews
- Tax deadlines
- Audit timeline (if applicable)
Improvements:
- Automation opportunities
- Software upgrades
- Process streamlining
- Additional training
Monthly Close Routine
Establish consistent month-end procedures:
Week 1:
- Complete all transaction entry
- Reconcile bank accounts
- Review accounts receivable aging
- Process accounts payable
Week 2:
- Make adjusting entries
- Review preliminary reports
- Investigate variances
- Finalize entries
Week 3:
- Generate financial statements
- Prepare management reports
- Review with leadership
- Archive month's records
Week 4:
- Plan for next month
- Address any issues identified
- Update forecasts
- Resume normal operations
Best Practices for Ongoing Success
- Stay current: Don't let bookkeeping pile up
- Reconcile regularly: Monthly minimum for all accounts
- Review monthly: Look at financial statements every month
- Plan ahead: Forecast cash flow and budget
- Keep learning: Stay updated on best practices
- Use technology: Leverage automation where possible
- Backup regularly: Protect your financial data
- Document procedures: Write down your processes
- Seek help when needed: Consult professionals
- Continuous improvement: Always look for ways to improve
Congratulations!
You've completed all five parts of the Bookkeeping Rules tutorial! You now have a comprehensive understanding of:
✅ Part 1: Why bookkeeping matters and fundamental concepts ✅ Part 2: Maintaining proper documentation and records ✅ Part 3: Day-to-day transaction recording and management ✅ Part 4: Period-end procedures and adjustments ✅ Part 5: Financial statement preparation and analysis
Continue Learning
- Review sections as needed
- Practice with your own business
- Consult with accounting professionals
- Stay updated on regulations
- Join bookkeeping communities
Questions or suggestions? Visit our GitHub repository to contribute or ask questions.
Good luck with your bookkeeping journey! 📊