How to close out the year strong with QuickBooks

As the year winds down, businesses turn their focus toward cleaning up their financial books in preparation for tax season. A significant part of this process involves year-end QuickBooks reporting, which comes with its own set of challenges.

Revisit this webinar to discover how to efficiently tackle:

  • Incomplete books.
  • Outdated bank records and transactions.
  • Year-end QuickBooks clean-ups.

Our expert panel also walks you through five practical tips to enhance your reporting and some best practices for keeping your QuickBooks data clean all year round.

Whether you’re a small business owner or a seasoned accountant, these strategies will help you:

  • Conquer your year-end QuickBooks challenges.
  • Set the stage for a prosperous financial year.

Let’s dive in!


Common year-end QuickBooks challenges

The end of the fiscal year gets stressful with holidays, time-off requests, and an overall increase in activities.

From an accounting standpoint, this period also signals the rush to close out the books, creating a unique set of challenges that can strain even the most organized firms.

Here are three of the most common year-end QuickBooks challenges businesses typically face.

Incomplete books

As the year progresses, it’s easy to fall into the trap of entering transactions without reconciling them with your bank or credit card accounts.

Come year-end, you may realize you haven’t reconciled for the last few months, leading to a panic-induced flurry. This last-minute rush creates additional stress and leads to inaccuracies that cost you down the line.

Outdated bank records and transactions

Outdated bank records and transactions are another common challenge. Busy schedules may push reconciling your accounts to the bottom of your to-do list.

However, failing to update these records regularly:

  • Leaves you with a heap of transactions to reconcile at year-end.
  • Puts additional strain on your internal accounting department.

Cleaning up ahead of tax season

As the year draws to a close, internal accounting departments are hustling to prepare the books for the upcoming tax season.

Around this time, many businesses are also switching systems, whether it’s their payroll system or a time-tracking tool. These changes, which typically happen on January 1st, create a surge in activities that compound the challenges of cleaning up and preparing your financial records.

From an accounting firm perspective, the December-January period is one of the busiest times of the year. The numerous concurrent transitions can make keeping everything organized and accurate incredibly challenging.

Despite these challenges, it’s crucial to maintain an orderly financial management system to facilitate a smoother transition into the new fiscal year.

In the following sections, you’ll explore practical tips for enhancing your QuickBooks year-end reporting and mitigating these common challenges.

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5 tips to enhance your year-end QuickBooks reporting

Closing the books at the end of the year involves not just recording transactions but also evaluating and interpreting your financial data.

Here are five tips to enhance your year-end QuickBooks reporting.

1. Tailor data to your niche

QuickBooks is a powerful tool that provides an array of default fields and data.

Beyond capturing the standard data, consider customizing your data fields to serve your business needs better.

2. Automate your reports

Automating your reporting process saves you valuable time and reduces potential errors.

QuickBooks has some built-in functionalities for this, but other tools like Method help you fully automate your reports.

Regularly running and analyzing reports helps you:

  • Spot patterns.
  • Identify trends.
  • Anticipate future needs.

3. Ensure financial statement accuracy

Growing businesses need to consistently ask themselves questions like:

  • “Do I have money in the bank?”
  • “Can I cover payroll?”

However, enhancing your QuickBooks reporting requires more than that. Regularly monitoring your financial statements is vital. You need to:

  • Check for consistency. 
  • Identify anomalies. 
  • Prevent and manage errors.

For instance, a Profit & Loss statement by month reveals any inconsistencies in expenses that should be uniform over time, such as insurance or rent.

4. Evaluate your Chart of Accounts

Entries in the chart of accounts often become muddled or redundant in the everyday hustle. Regular review and clean-up are necessary to ensure accuracy and efficiency.

This includes checking for duplicate entries or variations of the same entry, which clutter your records and impede clear analysis.

A proactive approach to your QuickBooks data reveals valuable trends, whether seasonal variations or industry-specific patterns.

Understanding these trends helps you forecast accurately and plan strategically for your business. Use the tools at your disposal, such as sales dashboards, to visualize and interpret this data for better decision-making.

How to keep your QuickBooks data clean

Maintaining clean and accurate QuickBooks data isn’t a task that should be left for year-end alone. Regular evaluation and clean-up are crucial for optimal data health.

To keep your QuickBooks file clean, consider doing the following.

Limit QuickBooks access to necessary personnel

Start by restricting your QuickBooks access to key stakeholders. Too many users can lead to errors and compromise the integrity and security of your data.

Consider other tools for teams like sales, which may need partial data from QuickBooks but don’t require full access to your file.

Use QuickBooks for accounting data only

While QuickBooks is an essential tool for small businesses, it is crucial to remember that it is solely an accounting tool.

Avoid cluttering your system and only enter accounting data into QuickBooks. Use other systems for:

  • HR.
  • Sales.
  • Customer management.

Keeping your data organized helps ensure the accuracy of your records and makes year-end QuickBooks clean-ups much easier.

Regularly reconcile your accounts

Regular bank reconciliation is one of the most effective tools for maintaining clean data. This process helps you:

  • Spot errors.
  • Find duplicate transactions.
  • Identify missing entries.

Remember, even if transactions flow directly from your bank account into QuickBooks, you should still perform regular reconciliation to ensure the accuracy of the data.

Pay attention to account mapping

Another critical aspect of maintaining clean data is proper account mapping for items and services. This is how QuickBooks does its accounting behind the scenes, and errors in account mapping lead to problems in your financial statements.

Take the time to verify that your items and services are pointing to the correct accounts.

For instance, if you’re in the construction industry and offer a service like demolition or junk removal, ensure that this service is correctly linked to an income account like clean-up services income. If you use subcontractors for this service, ensure it’s associated with an expense account like construction or contract labor.

Similarly, if you’re selling products, you must handle more complex account mapping, including:

  • Assets.
  • Income.
  • Costs of goods sold.

Data is only as valuable as what you do with it. With a consistent, systematic approach, you turn your data into an insightful resource for your business while ensuring a smoother year-end close.

Bottom line: Ways to get more out of QuickBooks

When it comes to making the most of QuickBooks, you can employ several strategies to amplify your user experience and bolster the effectiveness of your accounting process.

For one, the version of QuickBooks you use plays a significant role. Selecting the appropriate version provides additional benefits that will simplify your workflow and save considerable time for your staff. Regularly assess your choice — at least annually — to ensure it’s meeting your business needs effectively.

Next, recognize the inherent strengths and limitations of QuickBooks. It excels at:

  • Creating invoices.
  • Running financials.
  • Other accounting tasks.

But, it’s not designed to be a comprehensive CRM or inventory management system. Consider enhancing its effectiveness by integrating it with best-in-class systems that supplement its capabilities.

Backing up your data is another essential aspect, especially for QuickBooks Desktop users.

Ensure you have an effective backup plan for your QuickBooks data. Regular backups help safeguard against potential data loss due to unforeseen circumstances such as hard drive crashes.

Once you’re confident about your QuickBooks version and data security protocols, consider adopting other tools to help manage your expanding business operations.

As your business grows, you’ll likely run into growing pains and find that QuickBooks alone can’t keep up with your evolving needs. Integrations with other applications help you:

  • Overcome growing pains.
  • Enhance the digital customer experience.
  • Optimize back-end operational processes., for instance, offers vetted apps that simplify workflows and provide more specialized functionality for QuickBooks Online. Similarly, QuickBooks Desktop users can tap into the Desktop Apps Marketplace.

These apps typically provide free trials, letting you test their effectiveness before committing.

If you’re starting to notice those growth woes, Method is here to help.

Method’s no-code platform syncs well with QuickBooks Online and Desktop, offering extensive workflow automation for estimates, invoices, customer communication, and more. 

The best part? You don’t need any coding experience to tailor the solution to your business.

By strategically integrating QuickBooks with specialized systems, backing up data, and choosing the right version, you get more from QuickBooks and transform it into an even more effective tool for managing your finances.

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