Difference between revisions of "Closing out the month"
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− | + | These are checklists of things that need to be done before the month is closed out for bookkeeping. By completing all the items on this list, we ensure a more accurate picture of actual income and expenditures -- useful when setting the budget. Sometimes transaction details that occur during a given month aren't known until a few weeks later, but in general transactions should be recorded as close as possible to the date of the transaction. When the amount is not expected to be known for a while, it may be necessary to enter a reasonable estimate in a timely manner, rather than wait for the details to settle. | |
+ | |||
+ | == Basics of catching up on the books == | ||
+ | ''Target: Done by the 12th day of the month.'' | ||
# record all checks from checkbook in books | # record all checks from checkbook in books | ||
− | # | + | # Create and pay bills, making sure to record not only the payment (which is to an a/p) but the expense as well. Create bills before writing checks. |
− | |||
− | |||
− | |||
#* record bills that have been paid automatically (If there have been any staffing changes involving credit card holders, make sure the online payments are still valid.) | #* record bills that have been paid automatically (If there have been any staffing changes involving credit card holders, make sure the online payments are still valid.) | ||
+ | #* Entering everything in payables@freegeek.org maillist should catch nearly everything here. | ||
#::PGE | #::PGE | ||
#::NW Natural | #::NW Natural | ||
− | #:: | + | #::Rackspace (cc) |
#::Waste Connections | #::Waste Connections | ||
#::Comcast | #::Comcast | ||
− | #::Portland Water ( | + | #::Portland Water (EFT - main checking) (quarterly - 3 6 9 12 ) |
+ | #::* Note: There are 4 separate water accounts and changing the credit card requires changing each of those accounts separately. | ||
#::Kaiser | #::Kaiser | ||
− | #:: | + | #::GNSA |
#::... | #::... | ||
− | #*Bills that need to be manually paid online | + | #* Bills that need to be manually paid online |
+ | #* These should only happen if there has been a mistake somewhere, or a change in credit cards or bank accounts. | ||
#::... | #::... | ||
#* write and mail checks for bills that need manual payment | #* write and mail checks for bills that need manual payment | ||
− | #::Integra | + | #:: Integra |
− | #::Central Electronic Alarm (quarterly) | + | #:: Central Electronic Alarm (quarterly) |
+ | #:: Aflac | ||
+ | #:: Calvert | ||
+ | #:: CWA | ||
#::... | #::... | ||
− | # | + | #* (get authorization from appropriate committee if bill is at all questionable) |
# pay rent | # pay rent | ||
− | |||
# record payroll transactions | # record payroll transactions | ||
#* net pay, etc. | #* net pay, etc. | ||
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#** remember that certain employees get holiday pay so if the pp includes a holiday that category will need to be split differently. | #** remember that certain employees get holiday pay so if the pp includes a holiday that category will need to be split differently. | ||
#** divide payroll tax expense as well. If the staff categories have different ratios of work days, then create a new ratio from the total payroll expense and use that. | #** divide payroll tax expense as well. If the staff categories have different ratios of work days, then create a new ratio from the total payroll expense and use that. | ||
− | # | + | # Retirement (Calvert) |
− | + | #* Prepare spreadsheet, compare calculated numbers against actual withholdings | |
− | |||
− | #* | ||
# record receipts | # record receipts | ||
#* credit card | #* credit card | ||
− | #* reimbursements | + | #* reimbursements |
# record daily income reports | # record daily income reports | ||
#* credit and debit card transactions for front desk and thrift store | #* credit and debit card transactions for front desk and thrift store | ||
Line 49: | Line 52: | ||
# record deposits | # record deposits | ||
# record online account transactions | # record online account transactions | ||
− | #* | + | #* Make sure most recent transactions have been downloaded to .iif and imported |
− | + | #* create monthly spreadsheet and sort | |
− | + | #* transfer from "Paypal Other Income" to proper accounts (general journal) | |
− | |||
− | |||
− | |||
− | #* | ||
− | #* | ||
# check A/R accounts | # check A/R accounts | ||
#* recycling vendors (i.e. Bear, Greenwall) | #* recycling vendors (i.e. Bear, Greenwall) | ||
Line 64: | Line 62: | ||
#** Schnitzer | #** Schnitzer | ||
#** Wireless Alliance | #** Wireless Alliance | ||
+ | #** Total Reclaim | ||
# check A/P accounts | # check A/P accounts | ||
#* recycling vendors | #* recycling vendors | ||
− | #** | + | #** Ecolights |
# reconcile bank accounts | # reconcile bank accounts | ||
#* ebay transfer | #* ebay transfer | ||
#* donations transfer | #* donations transfer | ||
#* savings (operating reserve) | #* savings (operating reserve) | ||
− | #* | + | #* First Tech payroll |
− | #** | + | #* restricted |
+ | #* Capital Pacific | ||
+ | #* Capital Pacific Holding | ||
+ | # reconcile line of credit | ||
# [[Reconciling the cash box|reconcile cash box]] | # [[Reconciling the cash box|reconcile cash box]] | ||
# Invoiced donations | # Invoiced donations | ||
#* Make sure all donations in the database are in the books. | #* Make sure all donations in the database are in the books. | ||
+ | #* Make sure insurances and depreciation are entered as monthly values. | ||
+ | # In QuickBooks run "Reports>Company & Financial>Profit & Loss Unclassified" for the month in question | ||
+ | #* The report should be all zeroes. | ||
+ | |||
+ | ===Adjusting Entries=== | ||
+ | # Reversing income entries | ||
+ | #* In the event that we estimated an income amount in a previous month (for example a recycling shipment with an estimated number) it is possible that the amount has been settled on. We will need to enter a transaction dated the first of the new month to undo the estimate and with it the actual amount. The difference should be (relatively) minor. | ||
+ | # Estimating expense entries | ||
+ | #* In the event that an expense amount is forthcoming that will affect the previous month (for example a payroll expense for a two week period that will occur in a few days from the start of the new month) the amount affecting the earlier month should be estimated and entered. When the amounts are known, we will need to enter a transaction to undo the estimate and with it the actual amount. The difference should be (relatively) minor. | ||
+ | |||
+ | == End of the Month Review Process == | ||
+ | ''Target: Done by the 15th day of the month.'' | ||
+ | # Check all prepaid expenses (Asset account, Other Assets) | ||
+ | #* Enter the monthly amount to expense | ||
+ | #* (typically insurance paid ahead of time). Expenses should be 1/12 of the annual amount. | ||
+ | # Check all accumulated depreciation (Contra-asset account) | ||
+ | #* Enter the monthly amount to expense | ||
+ | #* (typically fixed operating assets paid ahead of time). Expenses should be based on the expected life of the asset. | ||
+ | |||
+ | Review Miscellaneous accounts for transactions that should be re-classified. | ||
+ | |||
+ | Also, search for transactions over $1,000 and determine if they should have been capitalized. | ||
+ | |||
+ | Check online accounts (PayPal, etc.) and initiate transfers to bank accounts. Make a note to follow up and sweep receiving bank account into main bank account in a few days. | ||
+ | |||
+ | Check all bank account balances and initiate transfers to maintain proper balances. | ||
+ | |||
+ | Look for transactions with future dates. | ||
+ | |||
+ | == Reports == | ||
+ | ''Target: Done by the 20th day of the month.'' | ||
+ | * (A) Balance sheet / Statement of Financial Position for end of previous month (before the month just completed) | ||
+ | * (B) Income statement / Statement of Activities for the new month | ||
+ | * (C) Balance sheet / Statement of Financial Position for end of the new month (the month just completed) | ||
+ | (C) from one month should always match (A) from the subsequent month. | ||
[[Category: Accounting]] | [[Category: Accounting]] | ||
[[Category: Procedures]] | [[Category: Procedures]] |
Latest revision as of 18:55, 13 December 2013
These are checklists of things that need to be done before the month is closed out for bookkeeping. By completing all the items on this list, we ensure a more accurate picture of actual income and expenditures -- useful when setting the budget. Sometimes transaction details that occur during a given month aren't known until a few weeks later, but in general transactions should be recorded as close as possible to the date of the transaction. When the amount is not expected to be known for a while, it may be necessary to enter a reasonable estimate in a timely manner, rather than wait for the details to settle.
Basics of catching up on the books
Target: Done by the 12th day of the month.
- record all checks from checkbook in books
- Create and pay bills, making sure to record not only the payment (which is to an a/p) but the expense as well. Create bills before writing checks.
- record bills that have been paid automatically (If there have been any staffing changes involving credit card holders, make sure the online payments are still valid.)
- Entering everything in payables@freegeek.org maillist should catch nearly everything here.
- PGE
- NW Natural
- Rackspace (cc)
- Waste Connections
- Comcast
- Portland Water (EFT - main checking) (quarterly - 3 6 9 12 )
- Note: There are 4 separate water accounts and changing the credit card requires changing each of those accounts separately.
- Kaiser
- GNSA
- ...
- Bills that need to be manually paid online
- These should only happen if there has been a mistake somewhere, or a change in credit cards or bank accounts.
- ...
- write and mail checks for bills that need manual payment
- Integra
- Central Electronic Alarm (quarterly)
- Aflac
- Calvert
- CWA
- ...
- (get authorization from appropriate committee if bill is at all questionable)
- pay rent
- record payroll transactions
- net pay, etc.
- tax withholding
- oddball deductions, such as advance paybacks, etc.
- divide the expenses between months for pay periods that straddle two months
- divide by the number of work days on each side (this is not exact but is close and good enough for our purposes)
- remember that certain employees get holiday pay so if the pp includes a holiday that category will need to be split differently.
- divide payroll tax expense as well. If the staff categories have different ratios of work days, then create a new ratio from the total payroll expense and use that.
- Retirement (Calvert)
- Prepare spreadsheet, compare calculated numbers against actual withholdings
- record receipts
- credit card
- reimbursements
- record daily income reports
- credit and debit card transactions for front desk and thrift store
- "till total" amounts for front desk and thrift store
- daily transfers for front desk and thrift store (from end of shift forms)
- miscellaneous transactions (reimbursements, IOUs, money receipts)
- corrections (overages and short tills)
- Invoiced donations
- record deposits
- record online account transactions
- Make sure most recent transactions have been downloaded to .iif and imported
- create monthly spreadsheet and sort
- transfer from "Paypal Other Income" to proper accounts (general journal)
- check A/R accounts
- recycling vendors (i.e. Bear, Greenwall)
- NCER
- Metro Metals
- Hallmark
- Schnitzer
- Wireless Alliance
- Total Reclaim
- recycling vendors (i.e. Bear, Greenwall)
- check A/P accounts
- recycling vendors
- Ecolights
- recycling vendors
- reconcile bank accounts
- ebay transfer
- donations transfer
- savings (operating reserve)
- First Tech payroll
- restricted
- Capital Pacific
- Capital Pacific Holding
- reconcile line of credit
- reconcile cash box
- Invoiced donations
- Make sure all donations in the database are in the books.
- Make sure insurances and depreciation are entered as monthly values.
- In QuickBooks run "Reports>Company & Financial>Profit & Loss Unclassified" for the month in question
- The report should be all zeroes.
Adjusting Entries
- Reversing income entries
- In the event that we estimated an income amount in a previous month (for example a recycling shipment with an estimated number) it is possible that the amount has been settled on. We will need to enter a transaction dated the first of the new month to undo the estimate and with it the actual amount. The difference should be (relatively) minor.
- Estimating expense entries
- In the event that an expense amount is forthcoming that will affect the previous month (for example a payroll expense for a two week period that will occur in a few days from the start of the new month) the amount affecting the earlier month should be estimated and entered. When the amounts are known, we will need to enter a transaction to undo the estimate and with it the actual amount. The difference should be (relatively) minor.
End of the Month Review Process
Target: Done by the 15th day of the month.
- Check all prepaid expenses (Asset account, Other Assets)
- Enter the monthly amount to expense
- (typically insurance paid ahead of time). Expenses should be 1/12 of the annual amount.
- Check all accumulated depreciation (Contra-asset account)
- Enter the monthly amount to expense
- (typically fixed operating assets paid ahead of time). Expenses should be based on the expected life of the asset.
Review Miscellaneous accounts for transactions that should be re-classified.
Also, search for transactions over $1,000 and determine if they should have been capitalized.
Check online accounts (PayPal, etc.) and initiate transfers to bank accounts. Make a note to follow up and sweep receiving bank account into main bank account in a few days.
Check all bank account balances and initiate transfers to maintain proper balances.
Look for transactions with future dates.
Reports
Target: Done by the 20th day of the month.
- (A) Balance sheet / Statement of Financial Position for end of previous month (before the month just completed)
- (B) Income statement / Statement of Activities for the new month
- (C) Balance sheet / Statement of Financial Position for end of the new month (the month just completed)
(C) from one month should always match (A) from the subsequent month.