One of the most critical aspects of this process is closing accounts receivable. This account represents the money owed to the business and requires reconciliation.
There are a few tasks to do to ensure that your books are ready for the new year.
The essential year-end accounts receivable tasks include:
- Gathering financial records
- Reconciling invoices
- Writing off bad debt
- Reviewing
credit terms
How do you close account receivable accounts at year-end?
There are a couple of different methods that you can use to close out accounts receivable:
- The most common method is to write off any outstanding invoices as bad debt. But unfortunately, you will never receive payment for those invoices, and you will have to absorb the loss.
- Another method is negotiating with the customer to set up a payment plan. It might be a good option if the customer has financial difficulties but can still pay over time.
Documents needed for closing year-end account receivable accounts.
For
accurate closing procedures, year-end accounts receivable requires :
- Invoice records
- Payment records
- Bank statements and reconciliations
- Credit memos
- Collection notices
- Bad debt documentation
- Trial Balances
Eliminate the manual process of year-end closing
Year-end accounting can be daunting, but it doesn't have to be. By gathering all of your financial records and taking the time to organize them, you can make the process much simpler. Contact us today for personalized assistance in streamlining your year-end accounts.