Year-End Close
Definition
The final, more thorough close of the fiscal year: reconciling everything, counting inventory, recording final adjustments and preparing the books for taxes and annual reporting.
Want a deeper explanation?
A good year-end close is mostly the result of twelve good month-end closes. When months were skipped, year-end becomes a rush that delays taxes and invites errors.
A physical inventory count around year-end is especially important. Watch for: year-end adjustments that change the year's profit dramatically, which means the monthly books were off.
Example
In January, inventory is counted, fixed assets are updated, accruals are finalized, 1099s are filed and the CPA receives a clean trial balance.