{"id":6037,"date":"2026-02-26T08:03:47","date_gmt":"2026-02-26T08:03:47","guid":{"rendered":"https:\/\/www.acobloom.com\/us\/?p=6037"},"modified":"2026-03-10T04:59:33","modified_gmt":"2026-03-10T04:59:33","slug":"bookkeeping-health","status":"publish","type":"post","link":"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/","title":{"rendered":"The\u00a0Complete Checklist to Maintain Bookkeeping Health for Taxation and Audit Purposes\u00a0"},"content":{"rendered":"\n<p>Inconsistencies in tax&nbsp;returns&nbsp;are a gateway to receiving an Identification Request for Documentation (IRD).&nbsp;This can&nbsp;lead to&nbsp;greater ramifications&nbsp;like an IRS audit.&nbsp;Fortunately, this can all be easily&nbsp;avoided by&nbsp;simply&nbsp;being&nbsp;up to date with&nbsp;your&nbsp;bookkeeping. Poor&nbsp;<strong>bookkeeping health<\/strong>, such as&nbsp;failing to track&nbsp;business expenses or mixing personal and business funds, are red flags that arise during tax season or during audits.&nbsp;&nbsp;<\/p>\n\n\n\n<p>One of the best ways to avoid&nbsp;errors in&nbsp;bookkeeping is to keep an organized, consistent, and detailed checklist. A checklist is especially useful for managing bookkeeping in small to medium-sized businesses because it can be easily customized as the business grows.&nbsp;<\/p>\n\n\n\n<p>This blog serves as a checklist for businesses to&nbsp;maintain&nbsp;accurate&nbsp;bookkeeping and ensure&nbsp;integrity of financial records.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_50 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-69e7c7460bc5c\" aria-hidden=\"true\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69e7c7460bc5c\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Checklist_for_maintaining_Bookkeeping_Health_for_Taxation_and_Audit_Purposes\" title=\"Checklist for\u00a0maintaining\u00a0Bookkeeping Health for Taxation and Audit Purposes\u00a0\">Checklist for\u00a0maintaining\u00a0Bookkeeping Health for Taxation and Audit Purposes\u00a0<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#DailyWeekly_Bookkeeping_Checklist\" title=\"Daily\/Weekly Bookkeeping Checklist\u00a0\">Daily\/Weekly Bookkeeping Checklist\u00a0<\/a><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_incoming_and_ongoing_transactions_been_accurately_recorded_by_the_end_of_each_day\" title=\"Have all incoming and ongoing transactions been accurately recorded by the end of each day?\u00a0\u00a0\">Have all incoming and ongoing transactions been accurately recorded by the end of each day?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_associated_receipts_been_scanned_and_securely_saved_for_all_transaction_processed_during_the_day\" title=\"Have all associated receipts been scanned and securely saved\u00a0for\u00a0all\u00a0transaction processed during the day?\u00a0\u00a0\">Have all associated receipts been scanned and securely saved\u00a0for\u00a0all\u00a0transaction processed during the day?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_invoices_related_to_accounts_receivable_and_accounts_payable_been_thoroughly_reviewed_and_updated\" title=\"Have all invoices related to accounts receivable and accounts payable been thoroughly reviewed and updated?\u00a0\u00a0\">Have all invoices related to accounts receivable and accounts payable been thoroughly reviewed and updated?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Are_you_reviewing_cash_flow_at_the_end_of_every_day\" title=\"Are\u00a0you\u00a0reviewing cash flow at the end of every day?\u00a0\">Are\u00a0you\u00a0reviewing cash flow at the end of every day?\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Monthly_Bookkeeping_Checklist\" title=\"Monthly Bookkeeping Checklist\u00a0\">Monthly Bookkeeping Checklist\u00a0<\/a><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Do_all_entries_in_the_Profit_and_Loss_statement_correspond_accurately_to_those_in_the_Balance_Sheet\" title=\"Do all entries in the Profit and Loss statement correspond accurately to those in the Balance Sheet?\u00a0\">Do all entries in the Profit and Loss statement correspond accurately to those in the Balance Sheet?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Are_there_any_remaining_tax_payments_associated_with_each_payroll\" title=\"Are there any remaining tax payments associated with each payroll?\u00a0\">Are there any remaining tax payments associated with each payroll?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Do_the_inventory_records_match_the_actual_stocks\" title=\"Do the inventory records match the actual stocks?\u00a0\">Do the inventory records match the actual stocks?\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#QuarterlyYearly_Checklist\" title=\"Quarterly\/Yearly Checklist\u00a0\">Quarterly\/Yearly Checklist\u00a0<\/a><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_of_the_quarterly_taxes_been_paid_recorded_and_reviewed\" title=\"Have all of the quarterly taxes been paid, recorded, and reviewed?\u00a0\u00a0\">Have all of the quarterly taxes been paid, recorded, and reviewed?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_of_the_appropriate_tax_documents_been_physically_and_digitally_recorded_and_stored\" title=\"Have\u00a0all of\u00a0the\u00a0appropriate tax\u00a0documents been physically and digitally recorded and stored?\u00a0\u00a0\">Have\u00a0all of\u00a0the\u00a0appropriate tax\u00a0documents been physically and digitally recorded and stored?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_of_the_contractors_been_issued_Form_1099-NEC\" title=\"Have all of the contractors been issued Form 1099-NEC?\u00a0\u00a0\">Have all of the contractors been issued Form 1099-NEC?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_employees_received_their_annual_W-2_forms\" title=\"Have all employees received their annual W-2 forms?\u00a0\u00a0\">Have all employees received their annual W-2 forms?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Was_the_inventory_status_finalized_in_the_books\" title=\"Was the inventory status\u00a0finalized\u00a0in the books?\u00a0\u00a0\">Was the inventory status\u00a0finalized\u00a0in the books?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Are_there_any_loan_verifications_that_are_pending\" title=\"Are there any loan verifications that are pending?\u00a0\u00a0\">Are there any loan verifications that are pending?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Have_all_of_the_statements_in_the_books_been_reconciled\" title=\"Have\u00a0all of\u00a0the statements in the books been reconciled?\u00a0\u00a0\">Have\u00a0all of\u00a0the statements in the books been reconciled?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Are_there_potential_remaining_tax_deductions_or_credits\" title=\"Are there potential remaining tax deductions or credits?\u00a0\u00a0\">Are there potential remaining tax deductions or credits?\u00a0\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.acobloom.com\/us\/blog\/bookkeeping-health\/#Conclusion\" title=\"Conclusion\u00a0\">Conclusion\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Checklist_for_maintaining_Bookkeeping_Health_for_Taxation_and_Audit_Purposes\"><\/span>Checklist for\u00a0maintaining\u00a0Bookkeeping Health for Taxation and Audit Purposes\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Maintaining\u00a0a bookkeeping checklist involves conducting an internal evaluation of business operations. The following section presents a time-based, actionable, segmented approach to creating a bookkeeping checklist:\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"DailyWeekly_Bookkeeping_Checklist\"><\/span>Daily\/Weekly Bookkeeping Checklist\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_incoming_and_ongoing_transactions_been_accurately_recorded_by_the_end_of_each_day\"><\/span>Have all incoming and ongoing transactions been accurately recorded by the end of each day?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Correctly recording all transactions ensures not only proper accounting but also shows transparency in all daily business operations. Most small businesses use the cash method rather than the accrual method of accounting, so\u00a0accurate\u00a0cash flow both\u00a0coming\u00a0in and out is the best and most effective means of\u00a0maintaining\u00a0a healthy accounting system.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_associated_receipts_been_scanned_and_securely_saved_for_all_transaction_processed_during_the_day\"><\/span>Have all associated receipts been scanned and securely saved\u00a0for\u00a0all\u00a0transaction processed during the day?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Accurate documentation is necessary to verify transactions and for\u00a0<strong>audit purposes<\/strong>. All transactions should have sufficient detail to be retraced and\u00a0validated\u00a0to\u00a0ensure the integrity of financial reports and compliance with regulatory requirements.\u00a0Complete documentation also enables auditors to provide\u00a0timely, organized supporting documentation for all financial activities, thereby simplifying the audit process.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_invoices_related_to_accounts_receivable_and_accounts_payable_been_thoroughly_reviewed_and_updated\"><\/span>Have all invoices related to accounts receivable and accounts payable been thoroughly reviewed and updated?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Invoices must be classified using one of three different classification&nbsp;methods:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the nature of the transaction\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the supplier\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the\u00a0period\u00a0they are associated with\u00a0<\/li>\n<\/ul>\n\n\n\n<p>After they are categorized, recorded invoices should be reviewed and updated regularly to avoid errors and meet payment deadlines. Regular review and update of recorded invoices will help businesses keep on top of their cash flow and meet their financial reporting requirements.&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_you_reviewing_cash_flow_at_the_end_of_every_day\"><\/span>Are\u00a0you\u00a0reviewing cash flow at the end of every day?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Monitoring daily cash receipts and disbursements gives you a complete view of every financial transaction that your organization engages in. Monitoring cash flow\u00a0on a daily basis\u00a0not only gives you a better understanding of how much cash comes in and out of your business but also allows you to analyze past and expected trends in cash flow. In addition, daily cash flow management helps organizations detect any cash surpluses or shortfalls much faster so they can make\u00a0timely\u00a0decisions about\u00a0maintaining\u00a0their liquidity. Once an organization knows what its cash surpluses or shortfalls are, it can then make proper and\u00a0timely\u00a0finance\u00a0decisions to enhance its cash management and financial viability.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.acobloom.com\/us\/contact-us\/?utm_medium=orgnc&amp;utm_source=blog&amp;utm_campaign=us&amp;utm_content=consulting&amp;utm_term=in-content-cta-blog-banner\" target=\"_blank\" rel=\" noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"367\" src=\"https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1024x367.jpg\" alt=\"Outsourcing Revenue Cycle Management\" class=\"wp-image-2783\" srcset=\"https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1024x367.jpg 1024w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-300x108.jpg 300w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-768x276.jpg 768w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA-1536x551.jpg 1536w, https:\/\/www.acobloom.com\/us\/wp-content\/uploads\/2024\/07\/Outsource-Accounting-Services-CTA.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Monthly_Bookkeeping_Checklist\"><\/span>Monthly Bookkeeping Checklist\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Have all the bank statements been reconciled with the recorded financial statements?&nbsp;<\/p>\n\n\n\n<p>To ensure accuracy of their records, businesses can avoid problems by reconciling bank statements each month, with their financial record keeping in mind. Business owners also have sufficient time and resources to correct any discrepancies found during monthly bank reconciliation. Because of this, bank reconciliation can be&nbsp;very useful&nbsp;for business owners when trying to project future cash flows.&nbsp;&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Do_all_entries_in_the_Profit_and_Loss_statement_correspond_accurately_to_those_in_the_Balance_Sheet\"><\/span>Do all entries in the Profit and Loss statement correspond accurately to those in the Balance Sheet?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>It is good practice to check that the net income shown in the profit and loss statement agrees with the movement in equity shown on the balance sheet on a regular basis, as any discrepancies between these two statements may indicate an error that will impact, potentially, the accuracy of the company\u2019s income, which may then impact on its liabilities for tax\/or audit purposes. Therefore, examining both the profit and loss statement and the balance sheet can help to ensure that the company is providing\u00a0accurate\u00a0and clear communication of their financial position and performance to HMRC.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_there_any_remaining_tax_payments_associated_with_each_payroll\"><\/span>Are there any remaining tax payments associated with each payroll?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Every payroll cycle comes with tax obligations, including payment obligations. Payroll-related taxes will not be\u00a0submitted\u00a0on the same date as the\u00a0employee&#8217;s\u00a0payroll; therefore, there is an increased risk of errors or nonpayment of these taxes.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Do_the_inventory_records_match_the_actual_stocks\"><\/span>Do the inventory records match the actual stocks?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Due to human mistakes, theft, and system malfunctions, actual stock levels regularly differ from records held in the company&#8217;s inventory system. Therefore, regular reconciliation of stock records to actual stock levels is imperative. By implementing a scheduled inventory review (such as cycle counting) to verify that inventory levels are accurately reflected in the inventory management system (or perpetual inventory system), businesses can reduce stockouts, reduce theft, and improve order fulfillment accuracy.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"QuarterlyYearly_Checklist\"><\/span>Quarterly\/Yearly Checklist\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_of_the_quarterly_taxes_been_paid_recorded_and_reviewed\"><\/span>Have all of the quarterly taxes been paid, recorded, and reviewed?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Before tax season, businesses must confirm that\u00a0all of\u00a0their quarterly tax payments have been made on time, with proper documentation, and have been checked for accuracy. Completing these tasks helps businesses track their tax obligations\u00a0in a timely manner, avoid penalties, and remain compliant. Additionally, businesses will be prepared for the\u00a0<strong>purpose of\u00a0audit<\/strong>.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_of_the_appropriate_tax_documents_been_physically_and_digitally_recorded_and_stored\"><\/span>Have\u00a0all of\u00a0the\u00a0appropriate tax\u00a0documents been physically and digitally recorded and stored?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>According to Publication 538 and Topic 305, the IRS specifies specific retention periods for\u00a0different types\u00a0of records. Typically, all tax-related documents must be\u00a0retained\u00a0for at least three years after their filing. Depending on the type of tax, the\u00a0expiration\u00a0date can extend to years or, in some cases, be indefinite.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_of_the_contractors_been_issued_Form_1099-NEC\"><\/span>Have all of the contractors been issued Form 1099-NEC?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>To report any payments made to independent contractors, freelancers, vendors, and other service providers that exceed $600, businesses must complete and submit Form 1099 to both the IRS and the service provider in question to ensure each payment is being accurately reported as income, and to ensure that the customer does not underreport their income as a result of receiving the payment.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_employees_received_their_annual_W-2_forms\"><\/span>Have all employees received their annual W-2 forms?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Ensure each employee receives\u00a0their\u00a0W-2\u00a0and understands that\u00a0it\u2019s\u00a0an\u00a0accurate\u00a0reflection\u00a0of the\u00a0employee&#8217;s\u00a0gross\u00a0and\u00a0net compensation. Employees must understand their filing requirements and the IRS deadlines to avoid penalties, which is often mentioned in the W-2 forms.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Was_the_inventory_status_finalized_in_the_books\"><\/span>Was the inventory status\u00a0finalized\u00a0in the books?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Prior to implementation of accounting software, it is necessary to conduct a comprehensive review and verification of\u00a0the inventory\u00a0records, ensuring that they are\u00a0an accurate\u00a0representation of the number of items on hand. Once the inventory records have been completely reviewed and all entries have been determined to be\u00a0accurate,\u00a0complete\u00a0and current\u00a0in order to\u00a0ensure\u00a0accurate\u00a0financial statements. A complete review of inventory records will provide\u00a0an accurate, and reliable overview of beginning inventory levels, which will lead to improved financial planning and decision-making at the beginning of the fiscal year.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_there_any_loan_verifications_that_are_pending\"><\/span>Are there any loan verifications that are pending?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>To ensure all loans are properly verified and\/or confirmed, please verify that this\u00a0remains\u00a0the case for any remaining loans that need to be verified or confirmed to ensure the accuracy of the financial records. Financial Records are used by businesses to\u00a0determine\u00a0financial liabilities and current and future commitments (ongoing commitments), which are\u00a0required\u00a0to make sound decisions and\u00a0comply with\u00a0regulations. Additionally, confirming the outstanding loan verification status will ensure there are no delays in processing the loan and\u00a0maintain\u00a0the integrity of financial reporting.\u00a0<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Have_all_of_the_statements_in_the_books_been_reconciled\"><\/span>Have\u00a0all of\u00a0the statements in the books been reconciled?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Reconcile thoroughly to confirm that all account balances and all financial statements have been reconciled thoroughly so you can find errors and fix them.&nbsp;<\/p>\n\n\n\n<p>Reconciliation means comparing your internal records with external records (e.g., bank accounts) to verify accuracy.&nbsp;This is important so you can&nbsp;identify&nbsp;any&nbsp;additional&nbsp;errors, avoid fraud risks, and ensure the financial data you report to others is complete and&nbsp;accurate. In addition, when the same amount is in two or more sets of financial&nbsp;statements, the IRS is likely to audit you if it receives notice from the business about the duplicate amounts.&nbsp;<\/p>\n\n\n\n<h5 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are_there_potential_remaining_tax_deductions_or_credits\"><\/span>Are there potential remaining tax deductions or credits?\u00a0\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p>Review your business documentation for potential remaining tax credits and deductions including all miscellaneous revenue or expenses that you may not have recorded yet because if you did not report something that could qualify for a tax benefit, you could get a tax credit added to your total taxes which will reduce your overall tax liability.&nbsp;In order to&nbsp;determine&nbsp;whether you have other qualifications for tax benefits or to be eligible to receive a tax refund on your taxes, review in detail&nbsp;all of&nbsp;your income and expenses related to business. Make sure to&nbsp;identify&nbsp;types of activities that would qualify as business expenses&nbsp;in order to&nbsp;receive the maximum benefit from any potential tax credits or as many tax deductions that apply to this area of your business.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>By&nbsp;utilizing&nbsp;deductions and credits efficiently you will minimize the amount of taxes owed to IRS and therefore alleviate any cash flow challenges your business may have due to tax obligations as well as compliance with IRS\u2019s regulations concerning audits.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When using checklists that outline important accounting tasks (e.g., recording a transaction), companies can expand their financial records beyond merely creating\u00a0additional\u00a0records. One of the main benefits of\u00a0a\u00a0checklist is\u00a0its\u00a0ability to\u00a0be tailored to\u00a0the needs, industry, and complexity of the business. This provides a basis for scaling and adjusting a company&#8217;s financial functions, depending on how far it has progressed and\/or how\u00a0new problems\u00a0have arisen, especially when preparing for\u00a0<strong>taxation and\u00a0audit<\/strong>. The result is improved accuracy, efficiency, and compliance across all levels of operational activities.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Inconsistencies in tax&nbsp;returns&nbsp;are a gateway to receiving an Identification Request for Documentation (IRD).&nbsp;This can&nbsp;lead to&nbsp;greater ramifications&nbsp;like an IRS audit.&nbsp;Fortunately, this can all be easily&nbsp;avoided by&nbsp;simply&nbsp;being&nbsp;up to date with&nbsp;your&nbsp;bookkeeping. Poor&nbsp;bookkeeping health, such as&nbsp;failing to track&nbsp;business expenses or mixing personal and business funds, are red flags that arise during tax season or during audits.&nbsp;&nbsp; One of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6048,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[132,134,130,131,133],"class_list":["post-6037","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bookkeeping","tag-audit-ready-bookkeeping","tag-bookkeeping-best-practices","tag-bookkeeping-checklist","tag-bookkeeping-for-tax-preparation","tag-small-business-bookkeeping-tips"],"_links":{"self":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/comments?post=6037"}],"version-history":[{"count":9,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6037\/revisions"}],"predecessor-version":[{"id":6049,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6037\/revisions\/6049"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media\/6048"}],"wp:attachment":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media?parent=6037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/categories?post=6037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/tags?post=6037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}