8 steps, checklist, close the account That every accountant should know ❗

8 steps, checklist, close the account That every accountant should know ❗

Closing the account is to make the numbers in the account match the truth. Income and expense accounts will be off balance. Transfer to profit and loss account And the balance of the profit and loss account will be transferred to the capital account at the same time. with account balance Withdraw for personal use An entity can verify the correctness of the balance from the ledger by running a trial balance after the account is closed.

Closing Entries means the transfer of accounts related to capital accounts. which is a temporary account These include personal withdrawal accounts, income accounts, and expense accounts. to the capital account to find the correct balance of the capital account at the end of the accounting period Including finding the balance of assets and liabilities accounts, which after closing the account The remaining accounts, including the asset account, the liability account and the capital account, are carried forward to the next accounting period.

1. Set the closing date for new customers.

Most businesses in Thailand usually treat December 31st of each year as their closing date. But there will be some businesses that will want to close their accounts in other months. which can be done by having to decide in the first year of business when to close the accounting period and must be careful that the first year's accounting period must be closed within 12 months from the start of accounting Then stick to the same date for closing the accounting periods for the following years, for example, when the company opened on February 2, 2019, the entrepreneur can choose to close the account on January 31, 2020, and after that, January 31 of each year will be taken as the date. Close the accounting period, etc.

2. Reconcile accounts receivable and send a report confirming the balance to the debtor

Reconciliation of trade accounts receivable is an important step. This will make the accountant confident that the items shown in the accounts receivable report are correct and true. And most importantly, the confirmation of the balance of receivables. This ensures that at the end of the period we have a complete record of sales and receipts.

3. Reconcile creditors

reconciliation of that creditor similar method with the debtor side But we will focus on the issue of outstanding liabilities with creditors at the end of the period. In order to verify the accuracy and make a payment plan on time

4. Improve inventories

For non-service businesses, inventory at the end of the period is usually available, the bookkeeper must remind the operator to check the inventory at the end of the period in order to ensure the accuracy of the closing.

5. Reconcile cash and bank deposits

cash on hand reconciliation And bank deposits are absolutely essential. At least the reconciliation of cash movements should be done every month so that at the end of the year the workload will be reduced. However, at the end of the year, the reconciliation should be checked again. for confidence

6. Reconcile other transactions and check the item classification

Other items in the statement of financial position Whether it's assets, liabilities and shareholders' equity. The bookkeeper should be required to double-check the balance at the end of the year. with other available evidence such as

- Compare the balance in the prepaid expense account with Excel. The prepaid expense calculation table shows whether during the year the expenses were recorded for each period correctly or not.

- Compare the balance of fixed assets with Fixed Assets Register whether the depreciation was correctly recognized and recorded during the year or not.

7. Reconcile VAT and calculate corporate income tax.

If the accountant takes care of entrepreneurs who register for value added tax (Vat), do not forget to reconcile the full year's income with Por Por 30.

8. Create Financial Statements

- Financial statements are accounts that accountants have to do twice a year in order to submit semi-annual taxes. and full year income tax

- Making financial statements is important for business owners to make timely decisions. Otherwise, there will be no financial information to help plan the business properly.

- Accountants can use accounting software to automatically close statements and manage and manage daily operations. If documents are made through the system regularly

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