of your clients.

contact us at support@xenett.com
 Review Checklist for Month and Year-end Close P

Bank Accounts

Petty Cash/Drawers

Undeposited Funds

Merchant Clearing Accounts

Accounts Receivable

Inventory

Prepaid Expenses
Employee Advances/Loans

Fixed Assets

Security Deposits

Accounts Payable

Credit Card

Loans
Payroll Tax Liabilities

Payroll Payable/Clearing

Accruals

Equity
 Review Checklist for Month and Year-end Close Proce

Bank Accounts

Start youruncleared
Review review by checks
matching theconsider
and reconciledvoiding/writing
balance as per the
off Reconciliation
the checks thatStatement with
are older the3Actual
than monthsBank State
(after c
whosoever
been clearednecessary)
or may get cleared in the next month, so those should be fine as uncleared. Any other depos
itrequired, void/write
is not the off aftervoiding/writing
case, consider getting appropriate approval.
it off after getting appropriate approval. In case there are duplica
them too.

Petty Cash/Drawers
often and they may be keeping the Cash Register or maintaining it in the POS to keep track of Cash Paid-
case, request such a document/report and verify the balance with the books.

Undeposited Funds
Review that the undeposited payments are the most recent ones (i.e., dated the last few days of the mont
deposited
If there areinany
theold
future (or may have
undeposited alreadyfind
payments, been
outdeposited
why they in
arethe
notnext
yet period).
deposited. Consider void/writing o
approval.

Merchant Clearing Accounts

Review that this account balance should ideally consist of the last few days’ receipts, which should be dep
deposited
Look in the next
for receipts that period.
have not been deposited in the bank and find the reasons. Consider void/writing off
approval.
Some
In casemerchants
of any loan deduct fees from
was availed every
from payout so they
the merchant, you get the deduct
would money the
in the bank
loan net of fees.
installment fromMake
everysure
pay
adjustments for the same.

Accounts Receivable
memos or payments may have been wrongly entered. Fix it as the case may be. If it is negative because o
though.
Review the customers
Customers showing
showing negligible
Zero Balance. This (say
balances only less
means that
than invoices
$ 0.50, $ 1)and
andpayments/credits
consider writing ithave
off. An
made
Reviewwith
theacustomers
rounded figure, andoverdue
showing it might invoices
cause a for
smaller
moredifference in the Ifreceivables.
than 90+ days. they are not recoverable, cons
the necessary approval.
Review the ‘AR Aging Detail’ report to see any unapplied payments/credits and apply the same with the o

Inventory

Verify the balance with the client and adjust if necessary.

Prepaid Expenses
 where expenses are paid in advance but are small in nature (say, below the threshold limit of $ 2000 or w
decide to expense them only instead of doing prepaid adjustments.
Ensure to record expense recognition entries and match the ending balance as per Prepaid Schedule.
name to every single transaction (Pre-Payment and Expense Recognition entries). We can then run the P
group by vendor, showing us all the transactions grouped by each vendor and the remaining balance.

Employee Advances/Loans
Where the Advance Payment and Repayment is managed through Payroll System, match the balance as
shown
At in advances
times, the balance
aresheet.
paid directly out of the bank, but the repayment is made through Payroll. In this ca
not recorded as an Expense but booked as Advance only.
of accounts), It is a good practice to have just one account but then, assign the name to every single trans
Repayment). We can then run Employee Advance/Loan GL Report and group by the employee to know w

Fixed Assets

Look for any purchases below the Capitalization Limit (Say $ 2,000) and expense them out.
Ensure to
Review record depreciation
accounts entries, considering
like Office Expenses, any new assets bought
Office Supplies/Equipment, Repairsinand
the Maintenance
same period. etc., and tra
capitalization limit should be capitalized.
Ensure to have proper documentation/bill copy for each newly purchased asset.

Security Deposits
Ideally, this account's balance should remain the same every month except if any new deposit is added or
transactions
At times, when to confirm
contractthat it is for(say
is ended Security Deposit only.security deposit may get adjusted for the last rem
Rent agreement),
proper adjustments to book the expense and return the deposit.

Accounts Payable
or some credit or payments may have been wrongly entered. Fix it as the case may be. If it is negative be
okay, though.
Review the vendors
Vendors showing
showing negligible
Zero Balance. This (say
balances only means
less thanthat bills and
$ 0.50, $ 1)payments/credits haveit not
and consider writing off. bee
At t
made with a rounded figure and it might cause a smaller difference in the payable balance.
Review the vendors showing overdue invoices for more than 90+ days. If they are not payable, consider w
necessary approval.
Review that there are no such cash vendors like Amazon, Uber, Starbucks showing payable.
Review the ‘AR Aging Detail’ report to see any unapplied payments/credits and apply the same with the o

Credit Card
Review that there are no uncleared transactions. If there are uncleared credit card payments or charges d
statement date and expected to appear in the coming statement, they are just fine.

Loans
Wherever monthly loan statements are available, the loan accounts should be reconciled just like Bank Ac
should match.
 In case loan statements are unavailable monthly, reconcile the balance with the Amortization Schedule.

Payroll Tax Liabilities

Review and match the liability figure with the Tax Liability Report (Payroll Service Provider Companies sho
This account should reflect the balance yet to be paid and will be paid off in the future whenever it is due.

Payroll Payable/Clearing

Review that the balance in this account is a real payable and is getting paid off in the next month.

Accruals
Review that all recurring expenses such as Rent, Merchant Fees, Subscription Payments, Electricity etc a
the bill or an expense yet to be recorded, make sure to accrue the same.
Review
Since that payroll
accruals accruals
entries entries have
are generally beenonentered.
reversed the next day (the first of the following month), this accoun
out of the current month’s accruals only.

Equity

Verify that there are no abnormal accounts like ‘Opening Balance Equity’.
Verify that
Review theprior
newyear Shareholder
transactions Distributions
recorded to EquityortoPartner
ensureDraws were
they are cleared
correctly to Retained
recorded Earnings
(generally, it isinnot
thes
of
In capital
the caseevery
of a month).
corporation, review that the equity section has common stock, additional paid-in capital, a
account.
In the case of sole proprietorship or partnership, review that equity section has Member's Contributions an
partner.
 Review Checklist for Month and Year-end Close P

Profit & Loss General Review Points

Payroll
 Review Checklist for Month and Year-end Close Proce

Profit & Loss General Review Points

In the case of Cash basis accounting, revenue/sales are directly booked from bank deposits. These bank deposits mig
It needs to be separated from the total deposit amount and should be recorded as Liability.
If revenue
been is recorded
applied from any
to the invoice. Thisthird-party invoicing/billing
indicates duplication. app (say
Similarly, lookPOS), ensurehaving
for vendors to reconcile theCheck/Expense
Bills vs total monthly rev
tra
transactions.
Check if class tracking is used; if so, verify all transactions are assigned to a class.
Reclassify any expenses coded to a parent account instead of a sub-account.
Reclassify Uncategorized Entries (check Miscellaneous, Uncategorized, Ask my Accountant accounts) to appropriat
Look for any account showing a negative amount and take necessary action.
The expenses like Rent, Apps Subscription, and Electricity should be consistent. Accrue it if necessary.
Penalties,
Review Life Insurance,
accounts should
like Office be in aRepairs,
Expenses, separateand
Other Expense account.
Maintenance, Office Equipment, etc, and consider reclassifying
2.5k (as per the cap limit you set)
Review accounts like Insurance, Apps Subscription, Rent, etc to ensure that it doesn't have any expenses for the futu
Prepaid Expense.

Payroll

Verify that Gross Wages match the payroll report.

Review that Payroll Taxes should only include the employer portion and not the employee portion. It should match w
All corporations: officer wages should be split out from Gross Wages in a separate expense account.
At times, Advances are paid through Payroll. Make sure it’s not recorded as a part of Gross Wages but as an Asset o
Employee
Verify Benefits
Payroll should (Garnishments,
Deductions be recorded separately and kept
Investments, separate
Taxes from
etc) and Grossthat
ensure Wages.
it’s not recorded on the P&L but s
Balance Sheet.
 Review Checklist for Month and Year-end Close P

General Review Points

 Review Checklist for Month and Year-end Close Proce

General Review Points

Review
Look fortransactions without
Unusual Entries Payee/Name
such as a vendorand assign the who
or customers appropriate name.
didn't have (helpful if you
a transaction for awant
longto review
time (say expenses
for more bt
are transactions now. Review them to ensure that these are legitimate transactions.
Consider making
Consider mergingall
duplicate Vendors/Customers/Accounts.
those vendors/customers/accounts inactive that have not been used for more than 12 months (he
vendor, customer and GL List)
Review any
Review Duplicate
newlyEntries
createdand deletecustomer,
vendor, them as required.
and account transactions to ensure that it’s coded correctly. In the case
consider reaching out for W9 form, if not available.