If you prepare your books for your CPA before tax season, the return gets done faster and you spend less on clean-up fees. Most CPAs ask the same questions every year: are the accounts reconciled, do the balances make sense and where are the supporting documents. An offshore bookkeeping team can have all of that ready.
Key takeaways
- Reconcile every bank, card, loan and payment platform account through year end.
- Review receivables, payables and suspense accounts so only real balances remain.
- List fixed asset purchases and disposals with dates and amounts.
- Agree payroll totals in your books with your payroll provider's year-end reports.
- Send your CPA a single, organized package instead of answering questions one at a time.
Want your books CPA-ready this year? Book a free consultation
What does it mean to prepare your books for your CPA?
It means getting your accounting records into a state where your tax preparer can rely on them. They should be complete, reconciled and supported by documents, with unusual items explained. Your bookkeeper prepares the records, and your CPA prepares and files the return and gives tax advice.
Year-end checklist
- Reconcile all accounts through December 31, or your year end, including credit cards and payment platforms.
- Review accounts receivable and write off amounts you won't collect, with your approval.
- Review accounts payable and remove bills that were paid or entered twice.
- Clear suspense and uncategorized accounts.
- Record loan balances using lender statements, splitting interest from principal.
- List fixed asset purchases and disposals, with invoices.
- Agree payroll expense and payroll tax liabilities with your payroll provider's reports.
- Record owner contributions and draws separately from business expenses.
- Collect contractor details and payment totals your CPA needs for information returns.
- Prepare a short list of unusual transactions with explanations.
Ask us to run a year-end review of your books
What to send your CPA
A year-end trial balance, the profit and loss and balance sheet, reconciliation reports, the fixed asset list, loan statements, payroll summaries and your notes on unusual items. Ask your CPA early which format they prefer, and whether they want read-only access to your accounting software.
If your books are months behind, start with catch-up bookkeeping. To avoid a year-end rush, keep a monthly routine as described in monthly bank reconciliation and monthly management accounts. Our financial reporting service covers year-end packs.
Questions your CPA is likely to ask
Have short written answers ready for these, and your CPA's work goes faster:
- Did you buy, sell or dispose of any equipment, vehicles or property during the year?
- Did you take out, repay or refinance any loans?
- Were there any owner contributions, draws or loans between you and the business?
- Did you start selling in new states or countries?
- Did you hire employees or contractors for the first time?
- Were there any large one-off income or expense items?
- Is inventory counted at year end, and how is it valued?
Your bookkeeper can draft the answers from the records and leave the judgment calls for you and your CPA.
Working through the year instead of at year end
Most year-end stress comes from leaving everything until January. Monthly reconciliations, a quarterly review of balance sheet accounts and receipts collected as you go turn year end into a short checklist. Ask your offshore team to run a mid-year review as well, so surprises are found in July and not in March.
Frequently asked questions
When should I start preparing my books for tax season?
Shortly after year end, once December statements are available. Earlier is better if your CPA has a busy filing season or your books need cleanup.
Does my offshore bookkeeper file my taxes?
Your bookkeeper prepares the records and year-end package. Tax preparation, filing and tax advice should come from your CPA or tax adviser.
What is a year-end trial balance?
It is a list of every account in your books with its balance at year end. Your CPA uses it as the starting point for the tax return.
Should my CPA have access to my accounting software?
Many CPAs prefer read-only or accountant access so they can look up details themselves. Create a separate login for them instead of sharing yours.
Get CPA-ready with Oakridge Global
Our accountants prepare year-end packages that make your CPA's job easier. Schedule a consultation with Oakridge Global before your next filing season.