As the calendar year comes to a close, it's essential to take a proactive approach to reviewing your firm’s financials, operations, and compliance tasks. This guide is designed to help you stay organized, reduce year-end stress, and ensure nothing falls through the cracks. By following these best practices and completing the checklist below, your firm will be well-positioned for a smooth transition into the new year—with accurate records, clean books, and updated systems.
Best Practices to Maintain Year-Round
- Monthly bank reconciliations
- Monthly review of financial statements
- Monthly review of Accounts Receivable
- Monthly review of open matters
Year-End Checklist (Articles and Videos):
- Reconcile bank accounts [Video]
- Review Balance Sheet [Video]
- Review Trial Balance report [Video]
- Review Profit & Loss Statement [Video]
- Review WIP and Accounts Receivable [Video]
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Prepare and send financial reports to the firm’s tax preparer or CPA [Video]
- Balance Sheet as of Year End
- Income Statement as of Year End
- Close all books [Video]
- Distribute 1099-MISC and 1099-NEC forms to firm vendors (Due: January 31) [Video]
- E-file 1099s received for subcontracted work (Due: March 31)
- Review matters that need to be closed [Video]
-
Review list of users [Video]
- Confirm all active users are still needed
- Check for unbilled invoices
- Update Billing Rate cards for the New Year [Video]
Analytics for Your Year-End Reporting
To streamline your year-end process, clients on the Enterprise Plus or Enterprise Insights plan can leverage the Analytics module to create a comprehensive dashboard with all essential reports in one centralized location. Contact us today to explore how Analytics can optimize your reporting and insights.
Beyond CARET Legal: A Complete Financial Picture
A complete year-end review involves general financial best practices and reconciliations beyond the tools provided by CARET Legal, which we recommend for a comprehensive financial picture.
First, reconcile your total sales tax paid with your quarterly sales tax returns.
Similarly, your total payroll expense should be reconciled with your Form 941 tax returns and the W-3 form, which summarizes all W-2s issued to employees.
Important: These are general accounting recommendations and not specific functionalities of the CARET Legal software. For any questions regarding your firm's specific tax situation, please consult with your Certified Public Accountant (CPA).
Important Tax Deadlines to Remember:
- March 15th is the deadline for filing for S Corporations (Form 1120S), Partnerships (Form 1065), and multi-member LLCs (Form 1065).
- April 15th is the deadline for C Corporations (Form 1120) and individual tax returns (Form 1040).