Flare takes the complexity out of year-end closing processes by accounting for transactions in the fiscal year in which they occur. As a result, you can work on the current, past or even a future fiscal year without worrying about fiscal year closing and opening balance carryforward. However, we highly recommend the following steps at fiscal year-end so that your account balances are finalized and ready for income tax preparation.
- Perform a bank reconciliation.
Reconcile each Flare bank account to ensure the bank account balance in Flare agrees with your real-word bank account balance.
- Enter invoices.
Create invoices you haven't created for the current fiscal year.
- Enter bills.
Record bills you haven't recorded for the current fiscal year.
- Enter payments received from customers.
Record any payments from customers you haven't recorded for the current fiscal year.
- Enter payments made to vendors.
Record any payments made to vendors that you haven't recorded for the current fiscal year.
- Record the value of inventory (if applicable) as at the final day of your fiscal year.
- Make year-end adjustments
Make adjustment entries for depreciation, amortization, accrued liabilities, prepaid expenses and other items. We highly recommend that you consult an accounting or tax professional for making these year-end adjustments.
- Run a trial balance
On the last day of the fiscal year, run a Transaction Summary report (trial balance).
Make sure the report date range is from the first day of the current fiscal year to the last. If you are running the report on the last day, choose “Current Year” in the date preset.
If you are finalizing the fiscal year after its last day has passed, choose "Custom" from the date preset and select From/To dates that correspond the first and last day of the previous fiscal year.
- Invite your accountant or bookkeeper to use Flare.
Your accountant or bookkeeper may want to make additional adjustment entries to rectify any financial discrepancies or view/run reports.
See User management to learn how to invite your accountant or bookkeeper.