STRATEGIC ISSUES...ONLINE 

For week of December 25, 2006, Issue #288

 

Featured Articles:

1.  Year-End Closing Procedures

2.  Tech Tip Weekly:  Get the Most Out of Your Laptop's Battery

3.  Compliance Calendar

 

1.  Year-End Closing Procedures

This is a reprint of an article we publish every year at this time.

The year-end closing process is a crucial and sometimes stressful time as owners and members of management anxiously await the financial reports that show the company's operating results for the year.  Here's a quick rundown of year-end closing procedures.

 

Complete All Payroll Processes

Make sure that all payroll processes have been completed before proceeding with the close.  Those processes include processing all payroll checks for the current payroll year (through December 31) and preparing, reconciling, and filing Forms 1099 and 1096 and all payroll reports, such as 941s, 940, and Forms W2 and W3.

 

Verify That All Transactions Have Been Recorded and Posted

Scan the ending balances and the transactions posted to each general ledger account to detect unusual entries or unexpected ending balances.  Also, most software packages will not allow the user to "close" the books until all entered transactions have been posted.

 

Reconcile All General Ledger Accounts and Make Necessary Adjustments

When reviewing the general ledger, many year-end balances will need to be adjusted.  The following procedures should be performed when reconciling the general ledger accounts:

- Reconcile ending general ledger cash balances to ending bank reconciliation balances.

- Reconcile ending general ledger credit card liability balances to ending credit card statement reconciliations.

- Reconcile the ending accounts receivable balance to the total of the Aged Receivables Report.

- Reconcile the ending accounts payable balance to the total of the Aged Payables Report.

- Adjust inventory quantities to agree with physical inventory counts and adjust the balances in the inventory account to lower of cost or market if necessary.

- Compute bad debt expense, and allowance for doubtful accounts.

- Verify that fixed asset sales are recorded correctly.

- Capitalize and amortize prepaid assets.

- Calculate and record depreciation on fixed assets.

- Record interest expense on loans and notes payable.

- Adjust marketable securities to fair value.

 

Review all Vendor and Customer Accounts for Inactive Accounts

Year-end is a good time to clean up vendor and customer records.  When inactive vendors or customers are identified, consider making them inactive in the accounting system to prevent accidental postings to them.  Most software packages allow that command.

 

Print Year-End Reports

Print out all reports so that you have historical transactions for the year.

 

Back Up Company Data

Before running a general ledger "Close" feature, back up all company data files.  Once the closing process has begun, it generally cannot be stopped.  If anything goes wrong, having a backup that can be restored may be the only way to undo the close.

 

Run the General Ledger Software Package Close Feature

Once all of the preceding steps have been followed, the general ledger must be "closed."

 

Purge Data, if Desired

Consider purging old transactions and inactive accounts from data files to help accounting software run more efficiently.

 

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2.  Tech Tip Weekly:  Get the Most Out of Your Laptop's Battery

1. Think small
The slower the components and the smaller the display, the less power needed to run the machine. A 12.1-inch screen uses 50 percent less juice than a 17-inch model, and getting a 4,200rpm hard drive instead of the 5,400rpm model can mean an extra 15 to 20 minutes of battery life.

2. Control your power
Adjust your laptop's power settings to find a comfort zone where you're using as little power as possible with no interference in your computer tasks. The path to the control panel will vary according to your operating system and setup, but for Windows XP Home and Pro users, follow these steps: Go to Start > Control Panel > Performance And Maintenance > Power Options. Set the LCD screen to go off after 5 minutes of inactivity, let the hard drive stay active for 20 minutes, and store the system's contents in RAM when it shuts down. If your laptop goes to sleep too soon, adjust the settings.
  
3. Dim all the lights
Your LCD's backlight uses up to 10 watts of power, a huge battery drain. Lower the screen's brightness to where it's comfortable to view without squinting. In addition to the Power Options settings detailed in tip 2, most laptops have convenient function keys for controlling brightness. Look for the function key with the brightness icon and a down arrow next to it. (This is the F6 key on many laptops.)
  
4. Shut down unnecessary programs
When you're running your laptop on battery power, turn off devices and programs you don't need. When not connected to a wireless hot spot, turn off the Wi-Fi hardware. If you access wireless networks with a PC Card, remove it when not connected. Listening to music via the CD-ROM drive and watching DVDs are also big battery drains.

Article courtesy of CNET.com