Closing out the month

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.

1. record all checks from checkbook in books
2. 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)
3. pay rent
4. 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.
5. Retirement (Calvert)
   • Prepare spreadsheet, compare calculated numbers against actual withholdings
6. record receipts
   • credit card
   • reimbursements
7. 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
8. record deposits
9. 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)
10. check A/R accounts
    • recycling vendors (i.e. Bear, Greenwall)
      • NCER
      • Metro Metals
      • Hallmark
      • Schnitzer
      • Wireless Alliance
      • Total Reclaim
11. check A/P accounts
    • recycling vendors
      • Ecolights
12. reconcile bank accounts
    • ebay transfer
    • donations transfer
    • savings (operating reserve)
    • First Tech payroll
    • restricted
    • Capital Pacific
    • Capital Pacific Holding
13. reconcile line of credit
14. reconcile cash box
15. Invoiced donations
    • Make sure all donations in the database are in the books.
    • Make sure insurances and depreciation are entered as monthly values.
16. In QuickBooks run "Reports>Company & Financial>Profit & Loss Unclassified" for the month in question
    • The report should be all zeroes.

Adjusting Entries

1. 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.
2. 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.

1. 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.
2. 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.