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The end of the fiscal year is a hectic time for property managers. As the calendar flips to January 1st, your thoughts turn to closing out the financial books, preparing taxes, and getting ready for potential audits. 

Without a structured approach, important accounting tasks can fall through the cracks amidst the year-end rush. To bring order to the chaos, a comprehensive checklist is essential. 

Below you’ll find a step-by-step guide to streamlining your year-end financial closing. 

Following this checklist will ensure you accurately reconcile all accounts, finalize financial statements, organize supporting documentation, close out depreciation schedules, and complete all required bookkeeping tasks.

With this strategic checklist guiding your year-end accounting, you can head into the new year feeling organized, compliant, and audit-ready. The peace of mind of having your financial house in order is the perfect way to start a new fiscal year. 

Preparing for Year-End Closing

The groundwork for a smooth year-end financial closing starts well before the books are officially closed. Advanced preparation and organization will make the entire process more efficient.

Overview of Year-End Bookkeeping

unchecked Be aware of when tax documents must be filed, audits scheduled, and final reports submitted. 

unchecked Mark your calendar with key cut-off dates.

Organizing Financial Documents

Proper documentation is crucial for verifying the validity of all transactions over the past year. Begin gathering relevant financial records several months in advance. 

unchecked Collect bank statements, invoices, receipts, rent rolls, leases, and other proofs of income and expenses. 

unchecked Keep digital copies organized in folders on your computer and store physical documents neatly labeled. 

Having paperwork in order will streamline reconciliation and review.

With deadlines marked and documents organized, property managers can feel confident heading into year-end bookkeeping. 

Dedicating time for thoughtful preparation creates a foundation for closing out the financial year smoothly. 

Income Tracking and Verification

unchecked Carefully analyze rent rolls, leases, and financial statements to validate all income for the fiscal year has been recorded. 

unchecked Compare rental amounts on leases to monthly rent rolls. 

unchecked Identify any missing payments or deposits. 

unchecked Ensure one-time fees like security deposits and pet rents were properly logged. 

unchecked Look for duplicated or incorrect entries that need adjustment.

Expense Reconciliation

unchecked Cross reference invoices, bank statements, and ledger entries to confirm all expenses have been accurately categorized and allocated. 

unchecked Watch for irregularities between physical and digital records. 

unchecked Verify expense totals match invoices and receipts. Identify any dubious charges lacking documentation for follow up. 

unchecked Make necessary adjustments to reconcile discrepancies.

With meticulous income and expense tracking, property managers can feel certain all transactions have been properly logged for the year. This prevents financial surprises and provides an accurate picture of property financials, priming the books for closing.

Financial Statements and Reporting

unchecked Analyze statements closely to ensure accuracy before closing the books.

Profit and Loss Statement Analysis

unchecked Review profit and loss statements line-by-line to fully understand revenue and expense flows over the past year. 

unchecked Identify trends in occupancy rates, maintenance costs, management fees, and other categories that impact the bottom line. 

unchecked Look for areas that exceeded or missed budget targets. Make note of profit drivers and trouble spots to improve next year.

Balance Sheet Reconciliation

unchecked Verify all assets and liabilities on the balance sheet with supporting documentation. 

unchecked Cross-check cash balances. 

unchecked Review fixed assets and depreciation schedules. 

unchecked Confirm outstanding mortgage and debts. 

unchecked Make adjustments so the balance sheet accurately reflects the property’s fiscal position.

unchecked With meticulous financial reporting, property managers gain clarity on the property’s financial health and emerging trends. 

unchecked Finalized statements become the permanent record for the closed fiscal year. 

unchecked Double-check details, analyze thoroughly, and reconcile completely before filing these important year-end reports.

Compliance and Tax Preparation

With the books closed, property managers must shift focus to tax and compliance requirements. 

Tax Preparation Essentials

unchecked Compile all documentation needed to maximize tax deductions and prepare accurate returns. 

unchecked Clearly identify expenses like repairs, maintenance, interest, and depreciation that may be deductible. 

unchecked Have income statements, profit and loss reports, and supporting documents organized and accessible.

unchecked Work closely with your tax professional to submit complete and timely filings.

Audit Readiness and Compliance

unchecked Review records to ensure adherence to all legal and regulatory requirements. 

unchecked Verify proper payment of employment taxes, insurance, and licenses. 

unchecked Check for compliance with health and safety regulations. 

unchecked Make any necessary adjustments to policies or procedures. 

unchecked Develop compliant document retention plans. 

With paperwork in order and compliance confirmed, you can confidently undergo financial auditing.

Staying on top of tax and compliance obligations is key to smoothly closing the fiscal year. 

With taxes filed and regulations followed, property managers can achieve total confidence in their financial diligence. 

Taking these proactive steps leads to greater peace of mind all year long.

Reviewing and Planning for the Next Fiscal Year

The year-end bookkeeping process also involves assessing the past year’s financials and planning for future growth. 

unchecked Take time to review and reset budgets, goals, and strategies.

Budget Review and Adjustments

unchecked Compare actual income and expenses to the amounts budgeted for the fiscal year. 

unchecked Analyze any significant budget variances to understand why they occurred. 

unchecked Use those insights to adjust budget categories as needed to better align with emerging trends and costs. 

unchecked Update budgets with realistic targets.

Setting Financial Goals and Strategies

With a clear picture of the property’s financial performance, set specific goals for the upcoming year, such as lowering vacancy rates or increasing maintenance reserves. Develop proactive strategies to accomplish each goal, whether increasing marketing spend or decreasing utility costs through efficiency upgrades.

The annual financial closing presents the perfect opportunity to learn from the past year and make plans for the future. By budgeting accurately, setting achievable goals, and implementing strategic financial planning, property managers start the new fiscal year focused on growth and success.

Reach out if you need support taking these important steps to put your best financial foot forward.

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Owen Jones

Owner / CEO

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